Interviews

Costs and assets

Asset management and monitoring has long been a concern of freight operators, due to the structure of rail freight access charges and the need to pay to offset the costs of freight’s use of the track.

Poor asset management can lead to these costs and thus charges being miscalculated.

But Network Rail is really getting its act together on this issue, according to Chris MacRae, rail freight policy manager at the Freight Transport Association.

He said: “It has been a concern for rail freight operating companies. Traditionally, there certainly were issues about the extent to which Railtrack and latterly Network Rail had a proper grip on their assets’ conditions, and how that related to expenditure on those assets, and how that related to the cost to maintain those assets, through into rail freight access charges.

“I think it’s fair to say that Network Rail has been much better at that than Railtrack ever was.

“Although Network Rail has got better, one of the things that came out of the McNulty review and the ORR’s determination on Network Rail’s expenditure for what is now the current control period was that the cost of UK rail infrastructure is above comparable European benchmarks. This is a point that has been disputed by Network Rail, because it says it’s comparing apples with oranges, because of different structures and the like, but there are issues there.

“Indeed, one of the proposed benefits of Network Rail’s devolution has been the alignment of asset management much more closely with basic route requirements. That means that rather than being centrally planned, everything can be much more locally planned and locally delivered. That’s the theory – that things become more targeted in terms of spending and work prioritisation.”

Network Rail, throughout most areas of its operation, has been trying to make itself more open and accommodating to external suppliers, contractors, and partners – and loosening some of its more centralising and secretive instincts from its early years, dealing as it was with then with under-in- vestment and the aftermath of a series of disastrous safety failures.

This more relaxed and inclusive attitude has spread to its relationship with companies in the freight industry.

MacRae explained: “Network Rail is desperately trying to make itself easier to do business with. That’s not just in terms of rail freight operators, but also in terms of people who develop terminals, and on access agreements for connections from the main line into a new rail freight terminal, for example.

“Traditionally, that was an area of criticism – that they weren’t particularly easy to do business with in that respect. They’ve been making strides to become more closely accessible to the end customer and developers.”

MacRae is cautiously optimistic about the future for freight and its relationship with Network Rail, especially in light of some good news in Chancellor George Osborne’s Autumn Statement.

He said: “The announcements about certain freight projects all bode very well for a continuation of the Strategic Freight Network expenditure fund from the current control period into the next one.”

But more broadly, concerns remain in the light of the McNulty review, and in terms of the priority that devolved route managing directors will give freight.

MacRae said: “Obviously, where the network provider is effectively being regionalised and there is talk about ‘alliancing’ and closer alignment between Network Rail in a region and the predominant, usually DfT-franchised, passenger train operating company, that’s something that makes secondary users feel some concern. Freight is only one type of ‘secondary user’, alongside some passenger operators like CrossCountry, for example. But even the term ‘secondary user’ is emotive and can be taken in a negative way, even though it is generally just a statement of the facts.

“We have had a number of reassurances that freight will be protected. It’s good that Network Rail have appointed a freight director, which they didn’t have before – Tim Robinson is a very good chap who we’ve worked with already. There have also been more changes to Network Rail’s freight managers. Whereas before they had been a centralised team, pre-McNulty they were ‘decentralised’ out to the routes and regions – but they are now being brought back into the central freight team headed up by Tim Robinson.

“Their whole remit is to take a completely cross-network view of what freight needs, what’s going wrong, and what needs to be done to develop it. It’s early days, but we’ve seen positive moves so far.

“The proof will be in how engineering possessions are handled between different Network Rail routes. Most freight movements are long-distance, often crossing Network Rail’s borders; a good example is Freightliner’s Southampton to Coatbridge service.

“If one region took an engineering possession on one line, how does that tie up with the diversion and routing capability for other regions? It’s easy for Virgin West Coast trains on one Network Rail route, but for Freightliner, for example, there are now a lot of different Network Rail routes to deal with. That’s the sort of thing freight has concerns about, and everyone knows that those concerns are there.”

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