Comment

SRFIs and the development consent order process

Elizabeth Dunn, a partner, and Stephen Humphreys, an associate in Burges Salmon’s Planning & CPO team discuss the opportunities and challenges faced by Strategic Rail Freight Interchanges (SRFIs) in the UK.

Government statistics show that the rail freight industry contributes £870m to the economy and nearly £6bn overall to the UK’s output. Rail freight produces 76% less carbon dioxide per tonne than road transport and can carry the equivalent loads of over 50 HGVs (with the largest freight trains carrying the equivalent of up to 160 HGVs). 

With “the industry that carries industry” needing to double its capacity in the next 15 years to meet forecast demand, it is vital that much needed capacity and infrastructure is delivered to meet this growth. Whilst new linear development (including HS2) is being progressed by the government and Network Rail, the delivery of other freight infrastructure is in the hands of the private sector. This includes new SRFIs. The Development Consent Order (DCO) regime is in place for these planning applications but where are we six years on from this regime’s inception? 

The Planning Act 2008 introduced a new consenting regime for Nationally Significant Infrastructure Projects (NSIPs). This regime was designed to speed up the decision-making process for major infrastructure and to give developers, consultees, stakeholders and the public certainty that a decision would be taken within a set statutory time period. 

It frontloads the consultation and design processes and acts as a ‘one-stop shop’ allowing a number of powers and other consents, including compulsory purchase powers, to be included within the final consent. Certain proposed SRFIs (those which are, amongst other things, larger than 60 hectares and capable of receiving at least four freight trains per day) will require a DCO to be constructed. 

A key benefit of the NSIP regime is the primacy of the National Policy Statements (NPS) in the decision-making process. These are approved by Parliament and form the policy basis and justification for consenting NSIPs. 

The National Networks NPS (designated in January 2015) provides the policy framework for not only SRFIs, but also development of the strategic road network and the national rail network. The NPS recognises that there is a “compelling need for an expanded network of SRFIs” which means this aspect does not have to be made for individual sites. The NPS does not identify specific sites or suggest how a network of regional, sub-regional or cross-regional SRFIs is to come forward; this is up to the private sector to determine.  

Against this background, only two DCO applications for SRFIs have been submitted to, and consented by, the secretary of state for transport (SoS). Both of these are in England and both situated in the East Midlands – DIRFT III and East Midlands Gateway. 

Interestingly, East Midlands Gateway was granted by the SoS against the recommendation of the Examining Authority where the SoS gave the NPS a much wider interpretation in the interests of market requirements, demonstrating a flexible approach by the SoS in his interpretation of the NPS and further support for the need for new SRFIs. Two further applications for SRFIs in the East Midlands have been registered with the Planning Inspectorate, with one expected to be submitted in Q1 of 2017.  No date has so far been proposed for the second.  

Is the DCO regime putting developers off SRFIs?   

The statistics suggest that the prospects of securing consent for a NSIP are high (to date, only three of all 50 DCOs have been refused consent, with one refusal currently being challenged in the High Court). This is clearly a good news story for the DCO regime and should give both developers and funders comfort in the consenting process. 

However, this is only part of the story. The DCO process requires developers to adopt a different mindset and the expedited timescales come with a need to provide greater detail in applications and undertake extensive consultation, all at greater cost. For complex projects, the post consent amendment process, although improved, is still perceived as unnecessarily cumbersome. 

To date, there has been a steady trickle of applications, but despite the speeding up of the consenting process, and the support of the NPS, finding application sites for SRFIs remains challenging. Due to their size and the need to be strategically located between major road and rail links, SRFIs tend to be situated in the green belt and on the edge of conurbations. Their size and scale can make site identification difficult and they can attract wide objection. 

Being in the green belt engages additional planning tests, and developers must demonstrate that the ‘very special circumstances’ test contained in the National Planning Policy Framework has been met. This balancing act is a difficult one to achieve (and to promote). The policy support from the NPS assists with meeting this test, but additional justification will also be needed. 

The DCO regime is working; its efficient and all-encompassing approach has seen a high success rate.  It avoids the protracted planning process previously experienced under the Town and Country Planning Act which, as was seen with the St Albans SRFI, could take years to see a project through. The future of the next two applications will be carefully followed by all in the rail freight industry to see whether the consenting process can continue to deliver the additional infrastructure needed to meet the anticipated demand on rail freight.

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