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Hauliers set I ;ain from rail losses

26th November 1992
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Page 6, 26th November 1992 — Hauliers set I ;ain from rail losses
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Which of the following most accurately describes the problem?

by Juliet Parish iii The rail industry suffered several body blows this week with bulk hauliers set to cash in on work from cement giants switching from rail to road because of soaring costs.

A leaked report shows that Government will axe unprofitable rail freight services after privatisation: it says if goods cannot be carried profitably they should not be carried by rail at all.

The Department of Transport refuses to comment on the report, which was leaked to the Independent earlier this week. But Labour transport spokesman Brian Wilson says it shows the Government is only paying lip service" to transferring road to rail. "Privatisation policy points in precisely the opposite direction, with disastrous environmental consequences," he says.

Cement producers Castle cement and Blue Circle are moving an annual total of at least 206,000 tonnes from rail to road after fruitless price negotiations with British Rail's bulk carrying division, Trainload Freight.

In January Castle Cement starts switching 200,000 tonnes of building materials on to road from its Ribblesdale depot, which supplies the North-East and Scotland. Logistics director Jonathan Dale says he deplores the idea of putting more freight on to the roads, but explains: We have to face the economic realities; the cost of rail is rising disproportionately to the rate of inflation and road haulage."

Blue Circle will switch up to 6,000 tonnes a year of cement — the equivalent of 35 loads a day — from Weardale in County Durham by the middle of next year. it is also looking at moving to road deliveries at depots in the Midlands, the South-East and probably Scotland because of the cost of rail.

Trainload Freight refutes criticisms that it is deliberately pricing itself out of the market in some regions to wind up its less commercial freight routes. However, the leaked document says that lightly used lines will not be subsidised by busier ones.

"We deny we are cherry picking. We are a commercial organisation and cannot keep traffic which is not making a positive financial return," says a Trainload spokeswoman.

Last week TNT Managing Director and chief executive Alan Jones told the Commons Transport Select Committee that British Rail could clearly not compete profitably with road transport. Called to give evidence on rail privatisation, Jones said that rail did not suit modern requirements because it had not changed to meet customers' demands.

Every pound spent on British Rail should be used to build roads, he told MPs.

The Government has admitted that BR privatisation, originally planned for April 1994, will be delayed. Rail users are bracing themselves for a delay of up to a year. 0 Alan Jones has confirmed that TNT is interested in buying part of Red Star, BR's loss-making parcels subsidiary.


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