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Rail-freight subsidy on track
Page 10
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40 by Guy Sheppard
A new freight subsidy due to be launched next year could trigger a big switch away from road to rail, says Simon Co!bourne, Exel's commercial director for rail.
He predicts that the new grant will require far less long-term commitment to rail than existing subsidies: ''We think it is going to stimulate the market quite considerably. At the moment you have to sign up for five to 10 years—our clients don't know what their supply chain will look like in two years."
The Company Neutral Revenue Support scheme is currently being vetted in Brussels to ensure it complies with European Union regulations on state subsidy.
If approved, the grant will become available next summer; it will be targeted at major logistics operators such as Exel, TDG and Tibbett & Britten on middle-distance routes such as Felixstowe and Southampton to London and Birmingham. Go'bourne says much of this work is currently handled by subcontractors.
Rates will reflect the environmental benefit of switching from road to rail and the subsidy needed to make particular deliveries viable.
Co'bourne, who was on the steering group which drew up proposals for the grant, joins rail-freight operator EWS as business development manager in November. He says that although the market for carrying bulk goods such as aggregates and coal is well established, sectors such as drink and clothing still await proof that rail works.
"At the moment, we don't have anything tangible to show Industry," he explains. "This new grant will make It much easier to experiment." Colbourne adds that roughly 7% of road freight needs to be switched to rail if the government is to meet its target of boosting the rail freight market by 80% between 2001-2011.