Charterail finally fails
Page 8
If you've noticed an error in this article please click here to report it so we can fix it.
by Karen Miles • Road/rail company Charterail finally collapsed last week hitting confidence further in the rail freight sector and bringing the thorny issue of rail's punitive track costs to a head.
The decision by Charterail's directors to put the company into liquidation follows two months of indecision as it wrangled with its main shareholder and supplier, British Rail, over track costs. Charterail goes into liquidation on 12 November although it first announced the prospect at the end of August when it halted services.
Established and new investors forced the final collapse over concern that any new funds — originally pledged for developing the service — would be lost to paying creditors. Charterail has been notching up fixed costs of around £25,000 a week and earning no revenue since it first went into crisis. From March to August this year it had earnt about £4 million.
The complaint by Charterail to the EC Commission that BR has abused its monopoly is still with Brussels although it is so far unclear how the company's collapse will affect the outcome.
Charterail, however, says it was also troubled by inefficient locomotives and the heaviness of their Tiphook Piggyback road/rail trailers. The company carried about 2,000 tonnes of freight a night for customers including Pedigree Petfoods, Safe way, Heinz and Coca-Cola.
The association for rail freight users, the Rail Freight Group, says road transport can be the only winner and Charterail's loss will have an unwelcome knockon effect on the already-low confidence in rail freight.
In the run-up to privatisation RFG director Julia Clarke is demanding Government subsidy for the railways and a moratorium on rate hikes.