Department of Transport

Watts stresses government's commitment to rail freight
_______________________________________________________________

date 29 June 1995
source Department of Transport
type Press release

note 193

Privatisation offers the best long-term future for the rail freight
industry, John Watts, Minister for Railways and Roads, stressed
today.

Speaking at a conference on rail freight in London, he said:

"Past privatisations have already demonstrated the extent to which
efficiency and customer responsiveness can be enhanced. Improving
the standard of service to freight customers is the surest way of
attracting more freight to rail."

Mr Watts pointed out that the restructuring of the BR Trainload
Freight business in anticipation of privatisation had already brought
welcome consequences.

"The three companies - Loadhaul, Mainline Freight and Transrail - are
already competing with one another to win new traffic. They are also
working hard to promote their new corporate identities and to
demonstrate to the market that they can provide a high-quality
service," he said.

The Minister listed some of the new business which had been won by
the companies over recent months, including:

* a five year contract for Loadhaul to carry coal and petroleum coke
into the Hope cement works in Derbyshire

* a major new contract with ARC for Mainline Freight to carry over
300,000 tonnes of limestone a year from Tytherington Quarry to the
South-East,

* a new trial loads of domestic coal and calcified seaweed for
Transrail's "Enterprise" service.

Mr Watts indicated that the opening of the Channel Tunnel also
presented a number of new opportunities for the rail freight
industry, particularly in the field of intermodal freight.

"While our policies of privatisation and liberalisation are
revolutionising domestic rail freight, the opening of the Channel
Tunnel has brought about a revolution of its own for international
rail freight."

The Minister described the variety of freight services already
operating through the Channel Tunnel, and stressed the benefits
brought by these services.

"Channel Tunnel trains will bring many benefits to this country both
economically and environmentally. If the Channel Tunnel business
develops as BR has forecast, some 400,000 lorry journeys a year will
be avoided."

Stressing the Government's commitment to freight on rail, Mr Watts
drew the conference's attention to the success of the Government's
freight grant regime. He said:

"Over two hundred schemes have been awarded Freight Facilities Grants
since 1975, removing an estimated three million lorry journeys a year
from the roads."

Mr Watts confirmed that privatisation of BR Freight companies is
progressing well.

* The Trainload Freight companies have been advertised for sale this
week in the Financial Times and the Economist. An Information
Memorandum should follow shortly.

* An Information Memorandum was issued for Rail Express Systems Ltd
on 8 June and sale is expected to be completed by the end of the
year.

* Freightliner restructuring is progressing well. Vesting and sale
completion are targeted for later this year.

One of the themes of the conference was freight operators' commercial
relationship with Railtrack. Mr Watts set out the rationale behind
the Government's intention to privatise Railtrack during the lifetime
of this Parliament.

"Railtrack flotation is a key plank in the overall railway
privatisation programme. Privatisation should make Railtrack more
accountable to its customers, and will give Railtrack every incentive
to increase efficiency in the management and operation of the railway
infrastructure," he said.

NOTES TO EDITORS

1. BR's Trainload Freight division was restructured in April 1994 into
three regionally- based businesses (Loadhaul, Mainline Freight and
Transrail) with a view to introducing competition into the rail
freight market, while retaining reasonable economies of scale.

2. "Enterprise" is an innovative haulage service offered by Transrail
which can transport wagonload consignments as small as 50 tonnes.

3. Freight Facilities Grant can contribute towards the capital costs
of rail equipment where there are demonstrable environmental benefits
in securing a flow to rail.

Railhub Archive ::: 1995-06-29 DoT-001