www.rfg.org.ukTony Berkeley

1
CILT Future of Rail Conference The impact of
national transport policy on rail28 November
2007
2
The impact of national transport and other
policies on rail

• Effect of energy prices
• Emissions
• Traffic forecasts and what could change them
• Passenger fares
• Costs
• Planning
• Future actions by industry and government.

3
Let us start with oil!

• Brent Crude 51.7 84.6 per barrel over 12 month
  period to 24 October 2007
• Treasury assumes average oil price in 2008 is 68
  a barrelto stay constant in real terms until
  2012-13 Lords Written Answer HL5744 29 Oct 2007

4
Oil in the future

• Lack of supply not much left International
  Energy Agency having doubts about its forecasts
  on which US and UK Government based their own.
  Production is lower than in 2005. Guardian 24
  Nov 2007
• Increase in demand particularly from India and
  China

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So what happens when the oil price goes up to
200 or 300?

• Gas and coal generally follow oil prices.
• Electricity may not rise so fast if generated
  from nuclear or renewables.
• Will rail market share increase because of higher
  relative price of oil products?
• When will the Treasury take its head out of the
  sand and confront this possibility?

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Emissions

• Transport is the worst offender in the league of
  emissions reductions published in the DfT
  Response to the Eddington and Stern Reports
  total transport emissions are expected to reduce
  by about 10 by 2020 compared with 2000 levels.

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Emissions

• Transport is about the worst performer in the CO2
  reduction league in the DfT response to the
  Eddington Report

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Within the transport sector

• Passenger 58 g/p.km rail
• 104 g/p.km road
• 227 g/p.km air
• Freight 37 g/t.km rail
• 178 g/t.km road (gt3.5 t gvw)
• Source ATOC

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Present rail forecasts

• Freight 115 increase by 2030
• www.rfg.org.uk
• Passenger 30 in ten years
• DfT Rail White Paper July 2007
• assuming no change to the competitive
  relationship between modes

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Excess of demand over supply - 2030Freight
trains per day (sum of both directions) assuming
no increase in passenger trains

• 190 98
  80
• 60
  155
• 80

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Port of Rotterdam

• Expects 10 per annum growth in traffic for next
  decade
• Expects rail market share to increase by six
  times between now and 2020.
• Source Emile Hoogsteden, Director of Containers
  and General Cargo, Port of Rotterdam, at ASI
  conference Brussels 27 November 2007
• Will this be the same for the UK, even if we
  become more of a feeder line country?

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Factors to change relationship between modes

• Oil price hike with petrol at 4 per litre?
• Electricity price rise less.
• Electric cars developed electric trucks more
  difficult.
• More rail electrification
• Air travel much more expensive vv other modes

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Consequences

• More demand for public transport rail and bus
• Even more demand for rail freight
• Transfer of short haul air passengers to rail
• Does this mean that the UK will be more likely to
  achieve or exceed emissions reduction targets?

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Consequences for rail

• Rather than doubling demand by 2030, could it be
  three or four times?
• What about capacity on main lines, commuter
  routes, stations and rail freight terminals?
• Even Eddington admits to a problem on the WCML
  corridor, capacity can be boosted by 50 but, if
  current demand growth continues, very substantial
  additional capacity will once again be needed by
  2024.

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Passenger fares

• On the day when next years fares are announced
• Should passenger fares, the duty on road fuels
  and airline charges all be related to emissions
  and within an overall carbon trading scheme?
• Should commuters pay more rather than less than
  off-peak because of the additional resources
  needed to provide for them?
• Bus fares outside London make motoring look
  cheap!

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Our way of life!

• If we pay the full cost of our emissions and the
  direct costs of our choice of mode, we may not be
  able to afford to move around so much we may
  have to walk of cycle more, or transport must be
  subsidised.
• With imported freight due to rise at an even
  faster rate, if we dont want to accommodate it,
  then we consume less or have less choice.

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Is speed or predictability more important in
transport

• The July 2005 White paper compares rail
  favourably with air many compare rail
  reliability favourable with road.
• Is there a need to go for 92.7 passenger train
  reliability or will 90 do?
• Many freight customers want 96 on time to
  compare with road, where trucks often sit in
  parking to avoid being early when there is no
  traffic jam so that they always arrive on time
  when there is congestion!

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Costs of the railway

• Lower costs mean lower fares and charges!
• Does Network Rail deliver on cost savings?
• Efficiency savings CP3 31
• CP4? RFG believes same again
• NR already announced 18!
• What do we get
• Extra costs for 24/7 and higher reliability!

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Safety costs

• Safety is used as an excuse to stop things
  happeningsingle line working, trams on heavy
  rail lines, slab track, etc.
• Compare the safety regimes of the railway with
  that of road both are in theory covered by the
  Health and Safety at Work Act.
• Rail is vigorously enforced, road is completely
  neglected.
• Fatalities per annum road c. 3,500
• rail single figures to zero

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Comparisons

• 24/7 railway means more trains and more revenue.
• 24/7 is standard on main Belgian corridors.
  Infrabel use a combination of diversion routes
  and single line working.
• CN changes a 60 mph turnout with signalling in 8
  hours.

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Planning

• No freight terminals, new stations or new lines
  without planning permissions.
• Planning Bill may make these easier if rail is
  included in scope.
• In rail freight, NIMBY is alive and well!

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Actions

• Rail industry must continue to cut costs and find
  cheaper solutions, including safety related
  issues.
• Let us get away from the attitude that leads us
  to being the safest railway in the world one on
  which no trains run at all (we still get our
  bonuses!) and all the perceived danger and death
  is transferred to road for which we are not
  responsible!

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What Government should ignore!

• The Eddington Response recommends setting
  priorities such as cutting the predictable end
  to end journey times for goods and people and
  reducing the CO2 footprint of these journeys.
• Since higher speeds generally mean higher CO2
  outputs, this is odd!

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What should the Government do? - 1

• Take its head out of the sand, and consider the
  consequences of a long term hike in the price of
  oil.
• Take its Carbon reduction commitments seriously
  and implement policies to achieve this now rather
  than in 2050 when it will be others problem.
• Start now with schemes to reduce demand for short
  haul air travel and ensure rail services can
  substitute.
• Increase fuel duty and introduce national road
  user charge progressively towards road paying its
  full internal and external costs.

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What should the Government do? - 2

• Plan for a three or four times increase in demand
  for rail travel and transport by 2030 on
• Lines
• Stations
• Ports
• Rail freight terminals
• Since without these transfer stations, it wont
  work
• Rethink policies to encourage better bus and
  light rail integration.

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What do you think Government will actually do to
address these problems?

• Allow the lights to go out rather than burn more
  coal which would mean exceeding emissions limits?
• Introduce road user charging and air duty/tax to
  reflect full external cost recovery?
• Start a massive 20-year programme of enhancing
  rail capacity and delay airport expansion?
• Nothing but words?

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Possible Government answers

• These are difficult decisions for any government
  to take, and much further work will be needed
  before any decision can be made
• Meaning
• leave it until I and other Government ministers
  have retired!

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• Tony Berkeley
• Chairman, Rail Freight Group
• 07710 431 542
• tony_at_rfg.org.uk