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Grant cut hits rail freight hard
Page 14
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Hauliers keen on using rail freight in the future could be forced to fund facilities themselves. Guy Sheppard reports.
RAIL FREIGHT GRANTS are to be slashed by around a third in two years' time, dashing hopes of long-term growth in the sector.
The government says schemes making the biggest impact on the environment, safety and conges lion will now receive priority, provided they offer good value for money.
But the Railfreight Group, (RFG) which represents rail distribution operators, accuses ministers of abandoning their commitment to the sector.
RFG chairman Tony Berkeley says the decision is surprising when tackling global warming is such a high priority for the government. "Given the high level of private sector contribution, such grants are one of the most efficient ways of achieving an improvement in sustainable transport." Mike Ham, business development manager for West Country haulier Massey Wilcox, accuses the government of incompetence. "They pulled the plug on freight facilities grants, which were helping take traffic off the roads and on to rail, two-and-a-half years ago. Now we have been advised by the SRA (Strategic Rail Authority) that the only grants available from 2007 will be minimal."
Derek Potter, managing director of Ripon-based Potter Group, says the decision will send completely the wrong message to potential customers considering switching from road to rail. "They are going to say 'why should I take the risk when the government is reducing its spending like this?"
The government says a total of £50.4m will be available for rail freight grants and £19.2m for water and road freight schemes between now and 2007. In 2007-08, all three budgets will be merged into a single fund, which has provisionally been set at £22.6m.
The 'value for money threshold', whereby every pound spent on grants is currently expected to buy around El-worth of benefits, is being increased to £1.50.