Access to Ports: Memoranda Received

Access to ports: Memoranda Received

NEW items are listed below with the number and title in bold, and are available on the Members’ shared drive (Inquiry/CFU/Written evidence)

No. Author

PA01 Rail Freight Group

PA 02 Hull City Council

PA 03 Hutchinson Ports

PA 04 Haven Gateway Partnership

PA 05 Liverpool City Region Local Enterprise Partnership

PA 06 RMT

PA 07 Freightliner

PA 08 Associated British Ports

PA 09 Major Ports Group

PA 10 Peel Ports

PA 11 Port of Tilbury

PA 12 Harwich Haven Authority

PA 13 Royal Town Planning Institute

PA 14 Commercial Boat Operators

PA 15 British Ports Association

PA 16 Transport for London

PA 17 DB schenker

PA 18 Yorkshire and Northern Lincolnshire APPG

PA 19 Freight Transport Association

PA 20 Port of Tyne

PA 21 GB Railfreight Group

PA 22 DFT

PA 22a DfT

PA 23 Freight on Rail

PA 24 Tendring District Council

PA 25 DP World London Getway

Written evidence from Rail Freight (PA 01)

Rail Freight Group (RFG) is pleased to submit evidence to the Transport Committee’s Inquiry into Access to Ports.

RFG is the representative body for rail freight in the UK. Our member companies are active across all sectors of rail freight including train operators, ports, terminal operators, end customers, suppliers and support services. Our aim is to grow the volume of goods moved by rail where there are economic and environmental benefits in doing so.

Rail freight and ports are inextricably linked, with around two thirds of all rail freight being related to ports. This includes intermodal traffic to and from the major deep sea container ports, and also the more traditional bulk traffics, operating from a wide range of ports to inland destinations across the country.

In recent years there has been significant investment in port rail infrastructure and equipment, and also in the UK rail network. This has been welcome, and has contributed to growth particularly in the intermodal sector. The promised further investment from Government in last summer’s High Level Output Specification is also welcome.

However, there is still some way to go to ensure that transport supply chains to and from ports are as efficient as necessary to deliver for UK economic needs.

What should be the priorities for improved access to ports, and why?

We consider that the priority areas to be addressed are as detailed below.

Further development of the capacity and capability of rail routes from ports – and the links with the major UK rail networks. Government has made investment in the Strategic Freight Network with a particular focus on routes to ports. Routes from both Southampton and Felixstowe have received major upgrades to improve loading gauge, and future plans will also enhance capacity. Other ports, such as London, Tees, and Liverpool have, or are being, connected to the gauge cleared network. Work on the East Coast, presently underway, benefits bulk traffic from East Coast ports

The additional investment promised in last summer’s HLOS will also help to further enhance rail routes, including improving the capacity of the cross country route from Felixstowe, and the electrification of the routes from Southampton. A further £200m committed for rail freight may also be used to benefit traffic from ports, although the precise scheme allocation has not yet been determined. In addition, there has been considerable private sector investment in ports and terminals, handling equipment and railway rolling stock serving also to increase capacity and capability.

In the medium term, further electrification of freight routes to and from ports will be beneficial to allow greater use of electric traction. Consideration needs to be given to how access to ports and terminals can be best achieved, as electric catenary cannot be extended past reception sidings. The electrification of regularly used diversionary routes is also likely to be necessary.

To maximise the benefits of this investment, it will be important to ensure that the capacity created for rail freight can be used by it in the future. This is particularly important on mixed traffic routes where there are proposals to increase passenger services as upgrade work is undertaken. A robust strategy for safeguarding freight capacity needs to be established, including capacity on the major trunk routes linking ports to inland terminals. This should also include capacity freed up by the development of HS2, which could be used by freight.

Government may also wish to consider how the final links into ports are treated. Currently there is disparity in the funding requirements based on historic planning requirements, which may frustrate efficient capacity development. Whilst this is ultimately a commercial position for port operators, there should be policy equity in any future considerations.

Improving service provision There has been significant progress in the quality of service, with competitive operations from many ports, new equipment, such as the Super-Low 45 wagon, and greater choice of inland terminals. Further development is now necessary to;

a. Enable services to run on Sundays on a consistent basis – requiring coordination of engineering works between main and diversionary routes; b. Developing multi user services for those with smaller consignments c. Better efficiency on rail services to improve speed, performance and quality and reduce costs. d. Greater links between rail and the wider logistics sector

Developing the supply chain for the movement of biomass With the Energy Bill set to become statute later this year, many generators are looking to biomass as a way of substituting for coal fired generation. Drax and Eggborough are among sites looking to convert some, or all, of their units, once the precise details of the Renewable Obligations Certificates (ROCs) tariffs are confirmed. Biomass will need to move by rail from the ports to the power stations, and there are some challenges to be overcome to establish this.

Biomass can be moved in existing coal wagons but they need to be converted to ensure that the product stays dry. There is also a need to invest in loading and handling facilities at the ports and power stations. Although the majority of this could be funded in the private sector, this must be supported by a stable framework from Government, both in confirming the ROCs and also in setting freight access charges. ORR are expected to consult on charges for biomass shortly, following their conclusions on coal charges. It will be imperative that rail access charges do not act against developing this market, either by their actual level, or by the risk of future increases which could act against the case for investment.

Biomass trains will also need to be managed carefully on the network, as, unlike coal, it is not possible to stock pile it. Disruption and delay will therefore be more difficult to accommodate. However, the supply network is likely to be less complex, with less variation between product than coal which may help simplify timetabling. It is likely that as biomass reaches its potential there will need to be some investment in the rail network, via the Strategic Freight Network or other funding sources, to handle the volume and enable the longest possible trains to operate.

Exploiting the Channel Tunnel for through rail freight. The Channel Tunnel, whilst not strictly a port, fulfils a comparable role for the import and export of goods to and from the UK. The difficulties of establishing through rail freight on this route have been well debated by this Committee and also by the House of Lords European Union Committee, and continue to frustrate.

Establishing the necessary inland terminals to handle particularly retail sector commodities. Rail freight cannot thrive unless there are suitable inland terminals for onward distribution of goods, and customers have sufficient competitive choice. The development of such facilities is complex and requires support in the planning system (see below), albeit that private sector funding is available.

Such facilities need to be well linked to the gauge cleared network and the strategic freight network, with its links to ports. Suitable locations must however also fit well with the needs of the wider logistics sector, rather than being driven solely by rail considerations.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

The National Policy Statement for National Networks (NPS), which is required under the Planning Act 2008 underpins the planning regime for nationally significant infrastructure. Specifically, and most importantly it should provide the national justification and need for infrastructure, leaving developers to justify only why their specific development is appropriate under that framework.

This NPS is particularly relevant for the development of strategic rail freight interchanges. DfT and DCLG did issue helpful guidance in November 2011, but this has no statutory weight and, in a planning application, would command less weight than documents such as local plans. Developers are therefore in a difficult position if proceeding with applications under the Planning Act without the underpinning documents.

Whilst it is possible to proceed without the NPS, the additional uncertainty is unhelpful. The Planning Act regime whilst an improvement on the previous regime, is expensive particularly up front, and requires significant time and investment, and developers need to consider the risks against other potential investments in the UK and elsewhere. We would therefore support the publication of the NPS at the soonest opportunity.

The NPS might also be expected to be relevant to certain rail upgrades, although the majority can be completed under permitted development rights.

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

Historic experience showed that regional structures could play a significant role in helping to develop links to and from ports. SEEDA, in the south east, were instrumental in making the case for gauge clearance from Southampton, and were a funding partner, and there are similar examples in the West Midlands, North East and North West. Indeed some final funding from One North East, which has now been abolished, is being used to part fund gauge clearance to Teesport. As well as funding, the advocacy role played by such bodies was also important.

The evidence of LEP’s engaging on rail freight or on the development of transport links spanning regions is patchy, and we have had little engagement. This is disappointing, although perhaps unsurprising given their lack of funding and powers.

We note that DfT have consulted on how funding, and decision making for sub national transport schemes might be devolved to new Local Transport Bodies. So far, we are not clear how such a move might take place, and what accountability and responsibility such bodies might have. Certainly, the need to consider regional and national links must be a requirement if suitable linkages to ports are to be progresses.

DfT are also considering devolution of rail franchises to regional and local bodies. Such organisations could play a role in promoting rail freight and links to ports, if the framework for devolution includes such duties.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

Experience of developing services from regional ports demonstrates that a critical factor is ensuring that there is sufficient volume to grow trainload services. This can be harder if the port cannot attract daily services, or the potential rail volume is small. This is more critical for containerised movements, as bulk traffics already operate from a range of regional ports.

That said, there are encouraging possibilities for developing new services from a wider range of ports, as intermodal facilities are developed, and equipment such as new low height wagons are enabling more efficient services to run on non gauge cleared routes.

How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight?

Rail currently has a market share between 20-30% from Felixstowe, and closer to 40% from Southampton. The market share at Southampton has increased significantly since the opening of the gauge cleared route, which has improved train utilisation and loading. There is no reason to suppose that market share from Felixstowe should not achieve comparable levels, particularly given the investment which is expected during the next control period, and similarly from the port at London Gateway, set to open during 2013.

In the bulk sectors, as outlined above, there remain opportunities to exploit new markets such as biomass to increase rail’s share of port throughput.

January 2013

Written evidence from Hull City Council (PA 02)

The following written evidence is presented on behalf of Hull City Council.

1.1 It is worth emphasising that the economic impact of UK ports is substantial. A recent study on this has pointed out that the ports sector directly employs 117,000 workers; contributes £7.9 billion to UK GDP, generates £2.0 billion in tax receipts to the UK Exchequer and generates large multiplier impacts. (The economic impact of the UK Maritime Services Sector: Ports, a report for Maritime UK, December 2012, Oxford Economics).

1. 2. The Humber Ports – Context The Humber Ports (Grimsby & Immingham, Hull, Rivers Hull & Humber, Goole and River Trent) form the UK’s largest ports complex measured by tonnes lifted, handling 16% of England’s sea freight. The Port of Hull plays an important pan regional role providing access for general cargo to the Northern Continent, Scandinavia and the Baltic. Hull is a key port on the E20 Trans-European road/rail corridor which runs from St Petersburg in Russia to Limerick in Ireland. The hinterland of the Humber Ports extends into the Midlands, Scotland and into the South East for some traffic.

1.3 The Humber Ports are in a prime position to become the English hub for the manufacturing, installation and servicing of offshore wind turbines. Indeed, the Humber Ports have been designated by the UK Government as one of five “Centres for Offshore Renewable Engineering”. Having “CORE” status means that the Humber Ports, local partners and the Government work jointly to develop the “offshore wind “opportunity and unlock barriers to investment. (Centre for Offshore Renewable Engineering, UK Government, 2011). Thus whereas the key growth driver for the Humber Ports was (as recently as 2007) related to coal importation (Freight, Route Utilisation Strategy, Network Rail, 2007), the key economic growth driver for the Humber Ports for the next generation and longer, will be the development of the offshore wind industry, with the Humber Ports constituting England’s – and possibly the UK’s – largest cluster.

1.4 Thus, in addition to the ‘traditional’ role of ports for the import and export of goods, some ports, particularly those within short journey times to the Round 3 Offshore wind zones in the North Sea will become major centres for the manufacturing and servicing of a major industry – and major centres of new employment growth. As the Government acknowledges, “provision of sufficient sea port capacity will remain an essential element in ensuring sustainable growth in the UK economy” (National Policy Statement for Ports , DfT, January 2012) and, of course, access to these ports will be critical in ensuring that offshore wind farm development contributes to the provision of much-needed employment and the nation’s low carbon energy needs.

2.1 Enhancing connectivity leading to economic growth was the subject of the Eddington Transport Study (2006), as summarised by the House of Commons Transport Committee in 2011, the seven main linkages by which transport improvements had an impact on economic growth are:

• Improved business efficiency, notably be travel time savings, improving journey time reliability and travel quality; • Stimulating business investment and innovation by supporting economies of scale and new ways of working; • Agglomeration economies which bring firms closer (in space or time) to other firms or workers in the same sector; • Improved labour market efficiency, enabling firms to access a larger labour supply, and wider employment opportunities for workers and those seeking work • Increasing competition by opening access to new markets, principally by integration of world markets’ • Increasing domestic and international trade by reducing trading costs; and • Attracting globally mobile activity to the UK, by providing an attractive business environment and good quality of life. (House of Commons Transport Select Committee, Transport and the Economy, Vol 1, March 2011)

2.2 The importance of National Policy Statements in providing strategic direction for the use of scarce (public) resources in the field of transport is highlighted by the Government’s National Policy Guidance on “Strategic Freight Policy” (DFT, November 2011). This policy guidance has provided the framework for the recognition of the Humber Ports being part of the Strategic Freight Network initiative. Work is being undertaken in the Humber Ports to try to ensure that rail routes will be available so that the latest generation of 9’6” Deep Sea intermodal containers can be carried on standard wagons (“W10/ W12 gauge clearance”). Early indications are that Gauge Clearance from the Humber Ports to the East Coast Main Line can be achieved for as little as £1m on the North Humber Route and £6m on the South Humber Route. However, the absence of a gauge cleared route across the Pennines remains a constraint and a serious constraint on this section of the core Trans- European Rail Network.

2.3 The German engineering conglomerate Siemens has selected the ABP owned Port of Hull to build what ABP has described as “possibly the UK’s largest transformational port project” – an offshore wind turbine manufacturing and assembly facility to be built at the Port of Hull. If this project goes ahead it is likely that work will begin on this major investment in 2013. As the National Policy Statements need to address (amongst other things), specific locations (where appropriate) in order to provide a clear framework for investment and planning decisions, Hull City Council would wish to see improvements to the A63 (in Castle Street, Hull) addressed in the National Road Policy Statement. This scheme was previously in the Government’s Roads Programme in the 1990’s and is still awaiting funding having been prioritised by the now defunct Regional Assembly, Yorkshire Forward and Regional Transport Board. It is now under preparation but has not been named as a ‘fast-track’ scheme for early delivery. The current earliest likely scheme completion date is 2017/18. Certainty of early completion of this scheme would give important confidence to potential major international investors in the wider Port of Hull area

2.4 Hull City Council would wish to see the full electrification of the Trans-Pennine rail route from Hull to the East Coast Main Line and on to join the already confirmed Cross Pennine electrification west of Selby. Electrification would provide crucial improvements to journey times and reliability necessary to address the remoteness perceived by many potential inward investors. Potential major foreign investors

investigating sites for new developments in the renewable energy off-shore wind sector have recently expressed concern about the general poor quality rail service (frequency, running speeds and reliability) between Hull and international airports in London and Manchester. Opportunities are available to make savings and speed up delivery by addressing out of date signalling, gauge clearance and electrification west of Hull as one scheme rather than three separate schemes. Network Rail are currently conducting a feasibility study into this and Hull City Council would expect the National Rail Policy Statement to be informed by this work.

3. How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

3.1 Arrangements for the creation of a Humber Local Transport Board are underway and following the timetable laid down by the DfT. Most of the major transport links to Ports are either part of the Strategic Trunk Road Network (responsibility of the Highways Agency) or part of the National Rail Network (responsibility of Network Rail) and as such fall outside the remit of any Local Transport Board. However, the Hull and Humber City Deal Expression of Interest which was submitted to Government on 15 January 2013 proposes a ‘Humber Spatial Plan’, such a plan will inevitably encompass strategic transport issues.

Proposed funding to Local Transport Boards is likely to be of a scale too low to seriously address the fundamental problems of poor access to ports. For example the Humber Local Transport Board is expecting to have only about £20m to spend in total across four local authority areas in a four year period (2015-19). The scale of the rail investment outlined above for the north Humber area is around £100m and the A63 Castle Street Road Improvement is expected to cost around £160m. Even if funding to Local Transport Boards were significantly increased it is unlikely that non- metropolitan groups of Local Authorities would have the resources or expertise to deliver schemes on this scale. For these reasons it would seem prudent for improvements to the major strategic transport network to continue to be the responsibility of National Agencies such as the Highways Agency and Network Rail.

3.2 Non-metropolitan areas of England are to some extent disadvantaged in the arrangements being developed in response to the Government’s rail decentralisation / devolution agenda. Current proposals being promoted by South Yorkshire, West Yorkshire and Greater Manchester to take over control of a combined Northern and Trans-Pennine Franchise to cover the North of England (“Rail in the North”) will inevitably be focussed on the core interests of the metropolitan PTE areas which have historically been around commuter passenger flows. Non-metropolitan areas within the North (such as the Humber) are at risk of being marginalised and important investment in port related freight and passenger flows could be disadvantaged. It is difficult for smaller ‘non metropolitan’ authorities/groups of local authorities to find the necessary resources and expertise to generate proposals which might better safeguard the interests of Port traffic.

4. To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

4.1 There is a clear correlation between road and rail improvements and the ability and necessity of ports to develop. Apart from the transport improvements / economic growth linkages mentioned earlier, the capacity of transport infrastructure to cope with the further development of ports is governed by a regulatory regime. Evidence provided by the UK logistics industry and its users, supported by evidence from international statistical, academic and industry sources, demonstrates that one of the

core areas in which Government could play a significant part in increasing the productivity of UK industry and strengthening its role in the UK economy was for the Government to “improve the longer term capacity, performance and resilience of our congested road and rail networks and in doing so, also improving connectivity to ports”” (The Logistics Growth Review – Connecting People with Goods, DfT, November 2011)

4.2 Lack of major investment in road capacity in Hull has meant that innovative and bespoke alternative methods of managing traffic demand / capacity have had to be developed to allow important new developments to come forward on what is already classified as a ‘highly stressed’ part of the Highways Agency’s network. Effectively peak hour capacities have been reached at key junctions on the A63 / A1033 in Hull, leading to delays, congestion, air pollution and peak traffic spreading. This approach has been agreed in a Memorandum of Understanding between the City Council and the Highways Agency and includes close monitoring, travel planning and planning restrictions on peak hour traffic generation. This approach has so far been successful in ensuring the granting of planning permissions for major renewable energy manufacturing facilities in the Port of Hull and associated supply chain facilities in the wider East Hull Enterprise Zone areas in advance of the delivery of the planned A63 Castle Street Improvement Scheme. Whilst we welcome the close co-operation of the Highways Agency to avoid the ‘blocking’ of new development, this approach can only ever be a short term fix and is no long term substitute for major new investment in the road network. Hull’s current JSA claimant rate is 8.2%, there are thus compelling social and economic reasons why barriers to the creation of new employment opportunities arising from transport constraints should be tackled. Certainty of accelerated delivery of these infrastructure improvements is essential to maximise external investment and to create new jobs.

5. Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

5.1 Within the Port of Hull the recent move towards the development of value-added manufacturing within the port estate rather than simple import / export operations, has by necessity led to the need for planning applications with associated assessments (including assessments of transport implications). The process for avoiding or mitigating adverse transport implications through the development control / planning process is well established. Where issues arise is around inconsistencies between this approach and where the transport implications (beyond the port boundary) of traditional port activities (permitted development) do not require any assessment or mitigation. It is the intention that this matter will be addressed through a Port Master Plan. Progress on the completion of a master plan for the Port of Hull is in abeyance pending a final investment decision on whether or not the port is to become the site for England’s largest wind turbine manufacturing facility. .

5.2 Work is underway to ensure that all relevant plans affecting / influencing the Humber Ports are in line with each other and give a consistent view on the priorities for transport improvements. These plans include the relevant Port Master Plans, Local Development Plan Core Strategies (Local Development Frameworks), Local Transport Plans, and the LEP ‘Plan for the Humber’. The Hull and Humber City Deal submission to Government, proposes the development of a Humber Spatial Plan in order to manage the strategic planning process and prioritise economic growth throughout the Humber sub region.

5.3 The Port Master Planning Process and the development planning process can in theory address local transport issues / impacts. There is, however, a missing ‘wider dimension’ relating to the National Transport Network. One example of this is the potential for the Humber Ports to offer a shorter, faster, more direct and convenient link from North to much of northern Europe and Scandinavia than the congested route via the Channel Ports. This could be achieved with relatively modest investment in rail gauge / electrification and improved Trunk Road links to the National Motorway Network. Investment in links to northern ports could negate the need for further more expensive infrastructure investments in the South East and could provide overall national economic and environmental benefits by reducing transport costs and vehicle emissions. It is currently unclear who, if anyone, has the responsibility for evaluating these wider benefits, how they might be evaluated in the absence of a viable national traffic model and how the results of any evaluation might subsequently feed into the Port Planning Process or the infrastructure planning process.

6. How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight?

6.1 In order to achieve the potential for growth in rail freight to / from the Humber Ports gauge enhancements are needed to allow the carriage of 9’6” deep sea containers on standard wagons. Although this W10/W12 Gauge Clearance can be achieved at relatively modest cost (£1m on the North Humber Routes to the East Coast main Line and £6m on the South Humber Route) this is proving difficult to deliver. Network Rail appears to constrain their business case when considering gauge enhancements to existing or guaranteed new users. This introduces a circular argument which is difficult to resolve. Some degree of speculative investment based on a more strategic approach to completing a ‘gauge clear network’ would appear prudent. If routes were gauge cleared new investors / rail users could be attracted. A more flexible approach to investment based on ‘Port Potential’ and ‘Geographic Optimisation’ rather than the current approach which favours further investment in often over used routes (often a result of historic market patterns rather than current demands) is needed.

6.2 The Humber Ports are in a unique position to take advantage of an extensive network of inland waterways (Rivers Hull, Ouse, Trent, South Yorkshire and Aire and Calder Navigations). These were all historically important for the movement of bulky, non time dependant cargoes but over recent years usage has generally declined due to competition from other modes and changes to market patterns. However with the more recent policy shift towards reduction in transport carbon emissions and the emergence of new markets such as movement of bio-fuel to inland power stations the use of water transport is once again growing in relevance.

6.3 Opportunities for coastal shipping (Port to Port movements) in the UK would appear to be vast with the relatively large number of Ports but this is currently not heavily exploited, often restricted to feeder services from major container ports and left to market forces rather than dealt with through any strategic planning system.

6.4 Taking freight off congested roads and moving it by rail or water can sometimes be more expensive than road transportation. Freight grants are designed to facilitate the purchase of the environmental and social benefits that result from using rail or water transport. The Department of Transport runs two schemes that encourage the use of rail or water transport instead of road transport: The Mode Shift Revenue Support scheme and the Waterborne Freight Grant scheme. Budgets for the

operating grants for future years are £20m for 2011-12, £19m for 2012-13, with a further indicative £19m for both 2013-14 and 2014-15.

• Mode Shift Revenue Support (MSRS) Scheme Mode Shift Revenue Support (MSRS) scheme (formerly the Rail Environmental Benefit Procurement Scheme) assists companies with the operating costs associated with running rail freight transport instead of road (where rail is more expensive than road). It is designed to facilitate and support modal shift, generating environmental and wider social benefits from reduced lorry journeys on Britain’s roads. Since September 2009 this scheme has also been open to inland waterway traffic.

• Waterborne Freight Grant (WFG) scheme The Waterborne Freight Grant (WFG) scheme assists companies with the operating costs, for up to three years, associated with running water freight transport instead of road (where water is more expensive than road).

6.5 Both of these grants rely on detailed specific proposals / bids being put forward by business who are considering using waterborne transport. Grants are generally allocated on the basis of the number of lorry journeys to be transferred to water transport.

Several areas of concern exist in relation to these funding incentives:

1. They appear to be primarily aimed at converting existing businesses who will in many cases have already picked locations and have established operating regimes based on road networks. A shift towards an incentive scheme targeted more closely at the ‘location decision’ stage for new business would be welcomed.

2. Information and awareness of these grants / incentives is often lacking in both the public and private sectors and available funding levels do not appear generous. It is unclear who should take the lead for actively ensuring maximum take up of these incentive schemes.

7. Are there any regulatory barriers to investment in ports? What could and should be done about them/

7.1 Regulatory barriers to investment in ports include: • The time delays involved in major planning applications with an impact on the Humber estuary. We welcome the Government’s creation of the ‘Major Infrastructure and Environment Unit’ (DEFRA) which has a remit to facilitate swift, proportionate resolution for nationally significant infrastructure projects in England at pre-application. As part of the Hull and Humber City Deal, together with partners in the Humber LEP, we intend to develop a Humber Spatial Plan which will significantly reduce the protracted timescales potential developers face with regard to economic development of the Humber Estuary. • The implementation by BIS of a “trade single window” at UK ports to reduce bureaucratic processes which can result in delayed delivery of food and drink stuffs to supermarkets should be accelerated. (cf. Trade and Investment for Growth, BIS, February 2011)

January 2013

Written evidence from Hutchison Ports Ltd (PA 03)

Summary

Hutchison Ports (UK) (“HPUK”) welcomes the Committee’s Inquiry and the acknowledgment of the importance of access to ports. HPUK agrees with Government forecasts that future growth in the ports will be focused mainly on the container sector. Due to the economics of operating large container ships, the ports that will continue to be the main focus for growth will continue to be those in the South and East. Capacity at Felixstowe/Harwich will grow to 8 million TEU per annum and it will continue to be the largest port for container traffic. The connections to and from Felixstowe are also a major route to market for exporters in the Midlands and North and are important to Government’s strategy to encourage an export led recovery and to grow exports to markets outside Europe. HPUK believes that the Government will get the best return on investment in access to ports by prioritizing investment in the A14 corridor to remove bottlenecks on routes serving the UK’s most important port complex.

PART A – GENERAL COMMENTS

1. Introduction

1.1 Hutchison Ports (UK) (“HPUK”) welcomes the Committee’s Inquiry and the acknowledgment of the importance of access to ports. The provision of efficient access to ports is vital if the UK is to remain a strong player in the global market, delivering jobs and growth and an export-led recovery. Government action needs to be driven by this overall objective, and take account of the specific nature of the UK Ports market, including the need to promote a level playing-field.

1.2 HPUK is a member of the Hutchison Port Holdings (“HPH”) Group, a subsidiary of the multinational conglomerate Hutchison Whampoa Limited (“HWL”). HPUK owns and operates the Port of Felixstowe, London Thamesport and Harwich International Port and, with over 3,000 employees, is the largest employer in the UK port industry.

• Port of Felixstowe is the largest container port in the UK. All the major container lines have a presence in Felixstowe and the port has over 90 services per week to every part of the world. It has a total of nine deep- water container berths, including the new Berths 8&9, opened in September 2011. The port handles over 3.5 million TEU of container traffic each year which represents more than 40% of all the UK’s container trade. In addition to containers, Felixstowe handles roll-on/roll- off (Ro/Ro) ferry services to North West Europe.

Felixstowe is also the UK’s largest container rail terminal handling 58 freight train movements per day, connecting the port with 16 inland destinations. Felixstowe has two rail terminals and HPUK is investing £40 million (including a €5 million contribution from the EU TEN-T budget) in a third terminal. The new North Rail Terminal will open in mid-2013. It will be capable of accommodating longer trains and permit 35-wagon freight trains to use the port. Eventually, the new terminal will double rail freight capacity at Felixstowe.

• Harwich International Port is one of the UK’s leading multi-purpose freight and passenger ports, with road and rail links to the Midlands, London and the South East. It is ideally located for North Sea freight and passenger traffic to and from Scandinavia and the Benelux countries, offering first class roll-on/roll-off, ferry, container and bulk operations. Harwich is also a leading port for the shipment and transfer of wind turbines to offshore wind farms.

Consent was received in March 2006 for Harwich International Port to develop a new deep-water container terminal at Bathside Bay, adjoining the existing facility. The new container port will offer 1,400 metres of deep-water quayside, 11 ship-to-shore gantry cranes, and a total capacity of 2.1million TEU per annum.

• London Thamesport is located on the River Medway. The Port, which includes container and warehouse operations, covers a total area of 85 hectares. It offers automated secure container yards and modern warehousing. The quay is equipped with two deep-water container berths, dredged to a depth of 15 metres alongside.

2. The UK Ports Market

2.1 The port sector in the UK has two main characteristics that set it aside from similar industries in most other countries; it is, predominantly a private sector industry, relying on private investors to identify the need for, and fund, additional capacity, and, secondly, it is characterized by competition between a large number of generally quite small ports, as opposed to competition between two or more operators within often much larger ports as is often the norm elsewhere. Both of these characteristics have implications for the provision of inland infrastructure.

2.2 Ports handle a wide range of cargo types and modes, each of which has separate implications for inland transport. Bulk cargoes, for instance, typically have relatively low unit values and cannot bear the cost of lengthy transport legs to or from the port. Ports that handle these cargoes therefore tend to have a relatively local hinterland.

2.3 Unitised ports, namely Ro/Ro and containers, serve larger hinterlands. The Ro/Ro market can be sub-divided into a number of largely distinct markets such as the Irish Sea, Western Channel, Dover Straits and North Sea that have, to varying extents, regional characteristics.

2.4 Container ports, and particularly deep-sea container ports, serve national hinterlands. There are relatively few deep-sea container ports in the UK. Felixstowe is, by some margin, the largest, handling over twice as many containers annually as Southampton, the second largest. Smaller quantities are handled at London Thamesport, Tilbury, Liverpool and Bristol. The provision of facilities for the very largest ships is costly and entails lengthy and inevitably expensive planning requirements. Only Felixstowe, London Thamesport and Southampton are capable of handling the largest container ships. Dredging costs to accommodate the largest ships are usually commercially funded in the UK but often publicly funded on the continent. The costs of the publicly funded dredging may not always be recovered in charges to port users.

2.5 HPUK’s ports are all common-user facilities, i.e. they serve any shipping line wishing to call at them. Other ports or facilities, including a number that handle bulk, semi-bulk and some ferry terminals are dedicated to one single user.

2.6 Government forecasts predict the strongest future growth in the container port market with lesser growth in Ro/Ro traffic and negligible growth in other sectors in the period to 20301. HPUK concurs with this forecast pattern of growth and believes the areas of greatest growth should be the focus of the current inquiry.

2.7 HPUK operates predominantly unitised ports and, unless stated otherwise, the comments in this submission refer to unitized traffic only and, within that sector, predominantly to the deep-sea container market.

2.8 Unitised traffic generates the greatest demand on inland infrastructure. It is also the mode that supports much of the export traffic manufactured in the UK. Where funds for investment are scarce it makes sense to concentrate on the provision of infrastructure to the sector that is growing fastest, deep-sea containers, and, within that market, the ports that are handling the greatest volume.

3. The Deep-Sea Container market

3.1 The size of ships serving the deep-sea container trades has grown significantly in recent years. The delivery of the 15,550 TEU E-class Maersk vessels in 2006 heralded the latest step change in the industry. Since then there has been a rapid increase in the number of ultra-large container ships (ULCSs) in service. All the largest vessels calling in North West Europe, including the UK, are on the Europe-Asia trade.

3.2 The number of ULCSs is set to increase further and the next generation of mega ships, Maersk Line’s 18,000 TEU Triple-E class vessels, are due to enter service in late 2013.

3.3 The deep-sea container shipping industry is very volatile and highly competitive. Tight control of costs and the preservation of sailing schedules – arriving on schedule or maximizing the opportunity to regain schedule when delayed – are of paramount importance to ship operators.

3.4 Container ships on all the major trade routes call in North Europe as well as the UK. The greater size of the European markets dictates that something of the order of 75% of ship capacity will be for continental Europe with only about 25% for the UK.

3.5 The main ports of call in Europe are all centred in the Hamburg – Le Havre range with the greatest concentration in Rotterdam. The charter costs of operating ULCSs are approximately $50,000 per day2. Any deviation from this

2 route adds significant cost and delay. The UK ports that minimize deviation from the core axis are those in the South and East of the country between Southampton and Felixstowe.

3.6 Large container ships are reluctant to deviate to ports on the west coast of the UK or significantly further north than Felixstowe on the east coast.

3.7 The deployment of larger vessels and the continuous increase in bunker costs has resulted in lines "slow steaming" to save costs. This requires more vessels in each string of service (11 vessels now compared to 8 a few years ago), reducing the number of port calls and sharing more slots on each other's vessels. As a result, port operators are seeing a reduced number of calls but the size of each call increased. This puts additional strain on resources: equipment, labour and yard. Dwell time of boxes in ports have also reduced. This peak and trough situation creates additional pressure on landside activities, both for the road and rail transportation linking the port to the national distribution centres.

3.8 Congested road and rail networks around urban centres is not something unique to the UK but is a phenomenon visible worldwide. Together with the need to speed-up maritime access by locating terminals nearer to main shipping routes, it has been the major factor behind a global trend for ports to be developed away from urban centres. Examples can be found in locations on all continents including Maasvlakte 2 in Rotterdam, Shanghai, Wilhelmshaven and Sydney/Botany Bay.

3.9 With greater potential for expansion through consented projects at Bathside Bay and Felixstowe, a location closer to the main ports of north Europe, the absence of a lengthy river access, and the ability to avoid congested urban inland networks, there is no threat to Felixstowe’s current position as the UK’s largest container port. Future growth is forecast to be greatest in the container sector and, within that sector, will be greatest in Felixstowe/Harwich area.

3.10 Government policy supports the rebalancing of the economy by boosting exports and narrowing the North-South divide. A significant proportion of export manufacturing is in the Midlands and the North. With the slowdown in the Eurozone, there is also a need to increase exports to new markets outside Europe. The main shipping routes to all these markets go through Felixstowe and there should, therefore, be a clear priority to invest in the A14 corridor as the main artery serving the UK’s most important port complex and the principal route to market for exporters throughout the whole country.

4. Port Planning

4.1 The port planning system in the UK is extremely complex. Securing consent for port developments can take many years and involves the assessment of numerous impacts.

4.2 The system, and legal requirements, are so complicated that they are understood be very few people even within the industry or amongst

regulators. Some developments have required Town and Country Planning Act (TCPA) consents as well as approval under the Harbours Act. Other, very similar, applications have been approved only under the Harbours Act.

4.3 There has been little consistency or clarity in the approach taken in recent port planning decisions towards the provision of inland infrastructure. Inconsistencies in the planning system distort the port market and can result in the sub-optimal provision of port capacity. It is unclear to what extent the revisions to planning procedures for nationally significant infrastructure projects will remove these inconsistencies going forwards but a transparent and consistent system is required to encourage investment in ports.

4.4 It still seems remarkably easy within the planning system for vexatious objectors to impose potentially expensive delay upon the developers of strategically important projects. The correct balance between the rights of the individual and the ability of developers to deliver nationally important projects in a timely and cost effective manner is still to be found.

5. Rail Freight

5.1 The majority of freight trains (38 per day currently, 19 in each direction) from Felixstowe travel down the Great Eastern Man Line (GEML) around the North London Line (NLL), then up the West Coast Main Line (WCML) to destinations in the Midlands and North West. As developments improve the Felixstowe to Nuneaton (F2N) line, more services use this route to access the East Coast Main Line at Peterborough or the WCML at Nuneaton.

5.2 Scale is critical in developing a wide range of intermodal options. The large volumes passing through Felixstowe create a virtuous circle. To be attractive to shippers, rail must be competitively priced, serve the destinations they need, and offer sufficiently frequency of service to represent a viable option to road freight. Without sufficient volume, and in the absence of large levels of grant, these are not possible.

5.3 In addition to providing the critical mass to support frequent services, the concentration of volume at one or two large ports allows the utilization of individual trains to be maximized. Without high levels of utilization, cost and carbon efficiencies cannot be achieved. The utilization of rail wagons at Felixstowe is high at 81%.

5.4 If a policy was contemplated to support the use of smaller regional ports one consequence would be the loss of economies of scale necessary for a viable rail freight industry and a reverse shift from rail to road with a commensurate increase in congestion and carbon emissions.

5.5 The recent High Level Output Statement (HLOS) published by Government included £200 million for the Strategic Freight Network in Control Period 5 (2014-2019) as well as other specific measures that will improve the F2N route. HPUK believes that these measures, and the implicit priority given to the route, are appropriate given the most likely pattern of future container trade growth.

5.6 Longer term plans should be progressed as a priority to electrify F2N. Provisional work should be undertaken in CP5 to allow upgrades to take place early in CP6. 5.7 It is critical to the future performance in both operational and environmental terms that F2N is electrified as the switch to electric locomotives over the next 10 years will make this a necessity.

5.8 There is a lack of clarity in the way Network Rail allocates elements of its budget such as that earmarked for the Strategic Freight Network. Whilst a degree of discretion may be necessary, there should be greater transparency regarding the criteria used and the decisions made.

5.9 The opportunities to encourage third party investment in the rail network are not being maximized. Any discussions about investment in the railway focusses on risk-sharing. A greater emphasis on reward-sharing might encourage other companies to invest in the network.

6. Road Freight

6.1 The relatively short distances over which much freight moves will mean that road is likely to remain the dominant mode for the carriage of goods to and from ports for the foreseeable future.

6.2 Felixstowe and Harwich have the advantage of being located away from congested urban centres but are strategically placed between, but close to, the main shipping lanes and the major areas of consumption/production. Traffic to/from the Haven ports does not significantly exacerbate congestion at the most crowded parts of the UK road network.

6.3 HPUK has introduced a number of systems to help manage road freight. Most notably, the Vehicle Booking System (VBS) through which hauliers pre-book hourly slots to call at the port has helped reduce peaks in demand and the strain they can place on both port and local road infrastructure. The Paris optimization software also provided by HPUK allows customers that use it to match inbound and outbound loads by road and rail to optimize equipment use, lower cost, and reduce the impact upon port-connected infrastructure.

6.4 HPUK supports early action to address the bottleneck on the A14 between Cambridge and Huntingdon although heavy goods vehicles from the Haven Ports account for less than 4% of vehicles on this section3. The route also serves port traffic from the south, including Thames and Channel ports, using the M11 and A1 to destinations in the North. Government should not wait until 2018 as suggested to take action.

6.5 HPUK opposes the proposal to charge tolls on the improved section of the A14. The proposal is arbitrary and discriminatory. It will impinge upon all businesses for which the road is the route to market, including exporters in other regions, increasing cost and reducing competitiveness. Any proposal to introduce tolls should only be made as part of a strategic and comprehensive national scheme.

6.6 If tolling to fund the new infrastructure cannot be avoided, it must be complemented by an efficient non tolled route to give businesses and motorists an alternative.

7. Maritime Access

7.1 As well as ensuring adequate access by road and rail, it is important that modern deep-sea ports have appropriate maritime access for the ultra-large container vessels that call at major European ports.

7.2 The importance of maintaining advertised shipping schedules – and the imperative to recover schedules when time is lost due to unforeseen events – is of great importance to container shipping lines. This dictates that ports with short navigation channels, dredged to a sufficient depth to allow access at all states of the tide have a significant advantage.

7.3 The trend to larger vessels, and the costs of dredging and delays, has led to a trend, visible worldwide, of ports moving downriver, away from city centres, and towards the open sea. Examples of this can be seen in many places around the world including Wilhelmshaven, Rotterdam and Shanghai as well as in the UK where Felixstowe has replaced London’s once dominant position. Moving away from city centres has the additional benefit of frequently taking port traffic away from the more congested elements of inland infrastructure.

7.4 Unlike certain/many other countries in the EU and around the world, the funding of maritime access channels in the UK has been the responsibility of port authorities who make investments on a commercial basis. Although this practice has put UK ports at a competitive disadvantage to many mainland European ports, it has worked well and ensured a level competitive playing- field within the UK.

7.5 The practice of commercially funding maritime access channels has also had the benefit of ensuring only investments backed by a sound business case proceed and has avoided the inefficient use of public funds. The recent decision to fund maritime access to the Port of Liverpool through a Regional Growth Fund grant to Sefton Borough Council, undermines this principle and, due to the competitive nature of the UK port market, threatens the viability of commercially funded investments elsewhere.

PART B – COMMITTEE’S QUESTIONS

1. What should be the priorities for improved access to ports, and why?

Greatest growth in future will be in the deep-sea container market. Deep-sea containers vessels will continue to call predominantly in the South East but serve a national hinterland. Priority for port access should, therefore, be connecting other regions with the hub ports in the South East and particularly Felixstowe which handles the greatest volume of container traffic and where the pound-for-pound return on infrastructure investment will be greatest. From a port access perspective, traffic – both road and rail – to/from Felixstowe avoids the already most congested parts of the UK transport network around London. Investment in the A14 and the Felixstowe to Nuneaton rail link should be afforded the highest priority.

2. Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where? There is a clear distinction between the strategic planning procedures for road and rail. The system of Control Periods and long term planning for rail is transparent and inclusive. The system for road investment is less so and can sometimes appear opportunistic and arbitrary. The decision to introduce tolls to upgrade the A14, but to fund upgrades to other routes by more conventional means, is one example. We are not sure that National Policy Statements are the answer but to introduce a long term planning regime for roads based on similar principles to those which exist for the railway would appear to have considerable merit.

3. How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

The UK’s major ports are mostly, and need to be, connected to the strategic road and rail networks. The answer above applies also to decision-making on these routes. Local Transport Boards may have greater importance for smaller ports but, as far as we are aware, most Boards are still being formed and it is too early to say how effectively they will work.

4. To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

The provision of adequate road and rail infrastructure is an important element for shipping lines and shippers in choosing which port to use. However, the location of the port relative to the optimum shipping routes and inland origin/destination of the cargo is probably more important. Public investment in infrastructure to regional ports that are not best located to service the ships that carry the goods will be inefficient and represent a poor use of scarce funds.

Any attempt by Government to influence port development through selective investment of road and rail is likely to discourage private port investment where it is really needed and undermine the system of market-led port investment that has served the UK very well for many years.

5. Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

Some applications for port development have been accompanied by extensive Transport Assessments which take full account of both road and rail impacts. This has not been the case at all locations and for all developments, and there is a clear need for a consistent approach.

HPUK is fully committed to growing rail traffic through its ports and is backing this commitment with significant private investment. High utilisation of rail services and frequent departures are necessary to keep down the costs of rail services and to offer a quality of service that makes them attractive. These are only possible at large ports. The continued development of hubs such as Felixstowe, supported by investment in appropriate elements of the Strategic Freight Network, is the best way to maximise rail’s modal share.

The geography of the UK and lack of navigable inland waterways means that inland shipping will not play a significant role in the distribution of unitised traffic throughout the UK. There is however a greater potential for increased use of coastal shipping. At the moment this represents only a very small proportion of domestic freight movements. The same cost and service frequency/quality factors that apply to rail transport apply equally to coastal shipping. The prospect for increasing the use of coastal shipping is therefore also greatest, and maybe only possible, at those ports with the largest volume of traffic.

7. Are there any regulatory barriers to investment in ports? What could and should be done about them?

The cost, complexity and uncertainty of the planning system can represent a significant barrier to port investment. It is too early to say whether revisions to the planning system have done much to improve the situation.

January 2013 Written evidence from The Haven Gateway partnership (PA 04)

The Haven Gateway Partnership

1. The Haven Gateway Partnership (HGP) is an informal private/public sector grouping that brings together Essex and Suffolk County Councils, Colchester and Ipswich Borough Councils, Babergh, Braintree, Maldon, Mid‐Suffolk, Suffolk Coastal and Tendring District Councils with the businesses of the area in North Essex and South Suffolk.

2. Originally created over ten years ago to link with the largest ports cluster in the UK, the Partnership includes the Harwich Haven Authority, Hutchison Ports UK (owners of Felixstowe and Harwich) and ABP (owners of Ipswich Port) as members. Among others represented on the Board are BT, the Chambers of Commerce, the University of Essex, the construction industry and the SME sector. The larger employers all contribute to the funding of the HGP.

3. The HGP is also actively engaged with the two Local Enterprise Partnerships that cover the sub regional geography – the South East LEP (East Sussex/Essex /Kent/ Medway/Southend & Thurrock) and the New Anglia LEP (Suffolk and Norfolk).

The Haven Ports

4. The Haven Ports represent the most important ports cluster in the United Kingdom and are supported by the conservancy and pilotage authority, the Harwich Haven Authority. The ports include: • Port of Felixstowe, owned by Hutchison Whampoa – the UK’s largest container port, accounting for close to 40% all containerised trade • Harwich International Port, owned by Hutchison Whampoa – the UK’s third largest cruise port with ferry services to Holland and Denmark which receives calls from the Stena Hollandica and Stena Britannica, the world’s largest ferries; increasingly it also provides lay‐down and assembly facilities for offshore wind‐development; coincidentally it is also the only UK port with direct rail connection to the Olympic site at Stratford • Ipswich, owned by ABP – the UK’s largest grain‐exporting port, with other bulk trades, including agricultural commodities and timber • Harwich Navyard – bulk trades and car exports to the Baltic States and elsewhere; operations and maintenance support for offshore wind • Mistley – bulk trades and construction materials

5. In addition the Partnership also covers the Port of Brightlingsea which also provides O & M support for offshore wind (Dong Energy) and has some fishing activities.

6. The Haven Gateway Partnership published an Economic Impact Study of the Ports and Logistics sector in the area. This shows that the industry employs some 32,200 people (or 1 in 10 jobs) with average salaries in excess of County and regional levels. The sector has a turnover of over £3 billion and the salary bill alone tops £1 billion with local

purchases of services estimated in excess of £100 million. We enclose a copy of the summary of the report, Driving the Haven Gateway Forward, the full version of which is accessible on our website www.haven‐gateway.org.

7. In many ways, the underpinning economic drivers of the ports cluster means the Haven Gateway has a real economic identity (not dissimilar to say Teeside, the Humber or perhaps Bremerhaven and its hinterland). For that reason, the HGP has always regarded the support and promotion of the Ports and Logistics Sector as its core business.

8. The historic existence and continuing importance of ports means that road access to them is also of vital importance to a wider business community. Fast effective routes to market are therefore good for Ports but also good for non‐port related businesses which are nevertheless clustered around ports (on land previously used in support of port activity). So for example in the Haven Gateway, the A120 not only serves Harwich Port but is also a vital artery serving Tendring’s fragile economy.

9. Apart from the ports, the Haven Gateway is also home to BT’s global research and development headquarters at Martlesham, employing over 4,800 staff, and the nuclear power stations at Sizewell and a growing creative sector with cultural assets such as Aldeburgh Music at Snape, Dance East in Ipswich and First Site in Colchester all linked closely to the University of Essexd an University Campus Suffolk, Above all we live and work in a sub‐region of the most exceptional environmental quality which we are all keen to see preserved.

10. In order to respond most pragmatically, we have provided direct responses to the questions you raise. This submission should not undermine any separate specific responses from any HGP public or private sector partners. Due to the importance of the issue, we would of course be willing to provide further information at Committee if that would be helpful.

Q. What should be the priorities for improved access to ports, and why?

A. Releasing development potential, relieving road and rail congestion, facilitating growth ie enabling increased economic activity and the creation of new jobs where the market requires them. Our view is that since the Eddington review, the importance of our International Gateways has been undervalued. Felixstowe for example handles around 40% of the UK’s container throughput and hence provides a hugely important export and import route for all UK business but particularly to/from the North and Midlands and therefore improving access is vital to UK PLC.

We think this should be considered in three ways:

• Road access – This should also include resilience routes. In the Haven Gateway area, the A14 is the key route to the Midlands but major problems arise in the event that it is closed due to incidents around Cambridge as it was for many hours on 17 January. A resilience route needs to be designated as an alternative and this exists in the form of the A120, which incidentally links Haven Ports cluster to Stansted Airport and we feel should be regarded as part of the National Strategic Road network. We understand that

all other major ports are connected to the National Strategic Road Network. These routes are clearly recognised as critical in getting goods to market and in supporting the supply chain / added value potential available through port activity. We therefore cannot understand why the link to Stansted is not part of this national network. Significantly, there has been no overall strategy for the A120 since the project to continue dualling the A120 from Braintree to the A12 at Colchester was abandoned in 2008. We are mounting a campaign to address this issue and have already made a presentation to the Minister responsible.

• Rail access – with greater certainty over the passenger rail franchise question (Great East Main Line) the implications for rail freight need to be considered

• Navigational access ‐ We have particular concerns that seaward access is often overlooked and relies in the UK primarily on private sector funding. With bigger ships at increasing drafts, ease of access to UK ports from Channel shipping lanes will be crucial if the UK is going to maintain hub status and often first port of call for services from Asia and North America. The alternative is that UK ports become the destination for cargo transhipped in continental Europe, undermining the viability of the UK ports industry and losing the opportunity to add value through delayed manufacture and finishing products. A strong UK ports sector will also enable the UK to develop a stronger short sea shipping offer. We would highlight here that thed dredge approaches to ports are a form of “tolled” infrastructure in so far as users (shipping lines) pay conservancy charges which are determined by tonnage.

Most importantly, we wish to highlight the fact that the best return on investment in infrastructure must be where there is greatest volume of trade nand, give Felixstowe’s pre‐ eminence as the UK’s top container port, this must mean investment in the A14, A120 and the Felixstowe to Nuneaton rail route for freight.

Q. Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports?, If so in what ways and where?

A. The lack of strategic response to the network is creating problems through interim policy making and not providing a level playing field. Where the Highways Agency is piloting Strategic Route Management schemes, such as the A12 and A120 in Essex, this only eincludes th A120 from the A12 to Harwich and not west from the A12 to Stansted. This lack of clarity and logic militates against significant private sector contributions to the improvement of the A120. There is a National Policy Statement on Ports and this is very clear on the future scale of port capacity needed by UK plc but is also clear that is expects future provision to be market led on the general principle that the developer pays, although we note that Government is reserving the right to “co‐fund” infrastructure for major new port developments. This market led approach is at risk of being undermined if there is uncertainty over the necessary transport investment needed to support port expansion where the market needs it. Freight movement is a hugely competitive business and the lack of strategic policy means locally for example that the A14 has a modified policy on proposing a toll in advance of other UK ports and providing little actual ROI; not recognising the importance of Haven ports to UK PLC and their full value to the UK economy. Any such National Policy must not just be land‐focused but must recognise the real need for investment in channels and channel deepening, shipping lanes and safety of navigation. The

absence of a Policy can only be detrimental to the interests of the Haven Ports and ultimately UK PLC.

Q. How satisfactory are the current and proposed decision‐making structures, including Local Transport Boards?

A. It is too early for us to tell. Although Local Transport Boards have now been created, they are not due to submit Assurance Frameworks until February 2013 and then have until July 2013 to submit their priorities. At this stage the DfT is unable to indicate the level of resources likely to be available to each LTB as they still appeared (as at 23 November 2012) to be awaiting confirmation from Ministers as to “LTB geographies”, but early indications are that the resources will not be of sufficient magnitude to be strategically significant. That said, we are supportive of the intention that LTBs should create a greater level of joint working between public and private sector but are concerned that they will have sufficient powers and resources to implement their priorities. There is also the potential for a gap between national priorities and decisions made about the national strategic road network and how these relate to and link with local priorities. The needs of rail freight is often overlooked at a local level in favour of passengers; adequate stacking (in the event of temporary yard closures at ports) and secure lorry parking facilities are also often inadequate and the provision of freight railheads and freight consolidation often gives rise to local residents’ objection because of local concerns about 24/7 use.

Q. To what extent can investment in road and rail infrastructure influence the market and regional decision‐making on port development?

A. Investment in road and rail connections as well as in navigational channel access provides investor and market confidence, and encourages investment in existing assets and in new commercial development, directly or indirectly related to the trades of the ports. It should be noted that the choice of port of call is made by the shipping line and ultimately its customer rather than the port operator. Port development will therefore occur where there is market demand. Investment in road and rail infrastructure should therefore be determined by market demand. The time (and the cost) of getting goods to market influences the route to market (choice of UK port Vs supporting road/rail infrastructure) with sustained reliability a major factor. Public sector funding of the scale being considered by BIS at the Mersey would be acceptable only if all such dredging throughout the UK was given the same degree of public funding support, but we note that the private sector is expected to provide such funding in other UK regions. This selective subsidy distorts competition and undermines investor confidence through a lack of policy certainty. More importantly, however, the Mersey is unlikely to attract the Asian trades as it is remote from the other major European ports of call for the lines, unlike Southampton – Le Havre or Felixstowe – Rotterdam/Bremerhaven.

In some ways the same point applies to road infrastructure – in this region we are being told the developer will have to pay, both directly and through road tolls, even where the congestion so alleviated is not due to freight traffic from ports to any significant extent. Elsewhere in the UK it seems probable that public sector investment will be made available even where it can be demonstrated that port developments such as Mersey/Liverpool are a major contributor to road congestion. A lack of level playing field in this respect is and further risks distorting the market significantly.

This is not a straight‐forward North v South issue. There is no alternative in northern ports to the deep‐sea container ships that call in Felixstowe and serve the growing markets of Asia. The road and rail routes of the A14 corridor are therefore an essential route to market for many businesses in the Midlands and North. The removal of bottlenecks on these routes and the provision of resilience routes are essential if the UK is to achieve an export‐led recovery and narrow the gap in economic performance between North and South.

Q. Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

A. By virtue of the planning system and the extensive modelling that developers have to provide as part of the process, we suspect the answer is yes. However, other financial burdens are placed upon port operators through via Sect 106 agreements; CIL is significant as is the timing of delivery. Often there is a requirement for infrastructure improvements to be in place in advance of any new development becoming operational. This is not a realistic expectation in the current downturn in global markets and risks making port developments unviable and therefore undeliverable, e.g. HPUK’s request to de‐couple improvements to the A120 from their original Bathside Bay consent, allowing the contribution to upgrading the A120 to be made before the container terminal starts operating rather than before work starts on site.

Q. How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port‐related road freight?

A. Neither Harwich nor Felixstowe have access to a dedicated freight network. Freight traffic shares rail capacity with the domestic main line passenger network on one eof th most heavily‐ used and congested networks in the UK. Much of the UK’s rail freight is dispatched to marshalling yards in West London before its onward dispatch across the country and uses the heavily used Great East Main Line to access the North London loop at Stratford. However, due to increases in fuel prices, for distances over perhaps 100 miles rail is now more cost effective than road transport alternatives and therefore assumptions as to the share of rail’s modal share in the Haven Ports are considered realistic.

There is some useful evidence emerging from the Haven Gateway ERDF‐funded Low Carbon Freight initiative (http://www.haven‐gateway.org/themes/low_carbon_freight_dividend) that SMEs are willing to consider switching to rail if assisted to gain access to rail freight routes.

Q. Are there any regulatory barriers to investment in ports? What could and should be done about them?

A. Planning, Environment, Marine Management, Natural England, English Heritage, Highways, State Aid, RSPB, EU Directives (Habitats, Birds), Marine Conservation Zones all constitute obstacles to investment in port capacity to a greater or lesser extent and often require the developer to provide remedial measures at considerable cost (habitat replacement). The planning process and the regulatory conditions could be streamlined to reduce the time it takes for applications to be determined (inc. call‐in and public inquiry) (reference recent changes to the planning system – also see Q3).

We have a very good example of the delays inherent in the Planning System in relation to the Bathside Bay development (a new container port proposed for Harwich by HPUK). The original application for this development was submitted in 2003 and granted planning permission on 29th March 2006 following concurrent Public Inquiries held between 20th April 2004 and 21st October 2004.

In 2010 HPUK submitted four further planning applications. Three referred to the extension of time of the 2006 permission for the container terminal; small boat harbour and the listed train gantry to 2021. The fourth application sought to vary the planning conditions that would allow the construction of the terminal platform in advance of some of the highway improvements. The company applied to Tendring District Council to vary the conditions attached to this consent. The Council’s Planning Committee determined to support HPUK’s applications in January 2011 and the application was subsequently referred the Secretary of State for Communities and Local Government to decide whether it should be called‐in for examination at Public Inquiry. It was not until the very end of October 2012, some 20 months after reference by the local planning authority that the Secretary of State decided to call in the fourth application to be considered cat Publi Inquiry. This led to HPUK immediately withdrawing their application and in our view effectively deferring any investment in the new port for many years. We feel this was hardly the best message to send to the biggest container port operator in the world and the largest Asian foreign direct investor in the UK.

January 2013

Written evidence from Liverpool City Region (PA 05)

1. Priorities for improved access to ports

1.1. Access to ports should offer multimodal options which encourage users to use carbon efficient methods (sea, canal and rail) to move freight. 1.2. Ports, and therefore access to ports, are of great importance to a wider community. Efficient access to ports increases the competitiveness of port users and therefore benefits the national economy. Consideration must therefore be given to the many users of ports such as freight forwarders and third party logistics firms to whom ports offer vital connectivity for their businesses. 1.3. Access to ports must therefore be seen in the wider context of national infrastructure and the development of the national planning strategy and at the local level the Community Infrastructure Levy. 1.4. In Liverpool City Region the port and wider maritime industry is of significant importance to the local economy and as such it has been identified as a key growth sector: SUPERPORT. 1.5. SUPERPORT comprises the City Region’s logistics assets including the port and its expansion scheme, a 36 mile inland waterway, international airports, ten motorways, an extensive rail network linking to the West Coast Mainline and easily accessible warehousing and prime development sites located next to the biggest population centre outside of London. 1.6. SUPERPORT is a transformational growth sector for the City Region which is being driven forward by the Local Enterprise Partnership in partnership with public and private sector stakeholders from the rail freight and short sea and international shipping industry. 1.7. We understand and support the imperative to offer subsidies for moving goods by train to reduce road freight; however the unintended consequence this produces is that, in some circumstances, short sea shipping (to the same destination) can be disadvantaged where it is not offered an equivalent subsidy. We would welcome an equalisation of subsidy between rail and short sea shipping to help reduce unnecessary road freight.

2. The delay in producing a National Policy Statement for National Road and Rail Networks

2.1. The delay in producing a National Policy Statement has a negative effect on improving access to ports as it dents market confidence. Before investing in major infrastructure,

Company Incorporation Certificate 2753023 Registered in England and Wales VAT Registration Number 618 5781 12

an investor requires supporting evidence, which Government strategy contributes to by clearly outlining the direction of travel for policy. 2.2. Without a National Policy Statement, the risk profile including planning risk for potential investment which our economy needs could be deemed too great.

3. Decision making including Local Transport Boards

3.1. The Liverpool City Region has established a Local Transport Body that will take strategic decisions on transport policy and major infrastructure investment. It will be important that the Liverpool City Region Local Transport Body works closely with the Department for Transport and its agencies to ensure that investment at a national level, e.g. on the strategic highway network, and at a City Region level can be integrated and fully address both national and regional requirements for port access whilst also addressing the local implications of port related development. 3.2. The new Local Transport Body will have due regard and focus on how transport investment can enable and support economic growth, job creation, and development. The Chair of the Local Enterprise Partnership will sit on the new Body. The City Region collectively supports the SUPERPORT Action Plan as a route to economic growth and job creation with the support of both public and private sector partners. Improved port access is essential to achieving these economic ambitions.

4. The influence of investment in road and rail infrastructure on the market and regional decision-making on port development

4.1. Investment in road and rail infrastructure has a significant impact on the confidence of the market to invest in both port development and in activities that rely on that infrastructure. 4.2. Shippers, retailers and manufacturers all rely heavily on the provision of appropriate road and rail infrastructure to enable them to move their goods to market quickly with a high level of resilience. Heavy congestion and frequent bottlenecks are the enemy of business and erode productivity and business performance. 4.3. In this environment, investment in appropriate road and rail infrastructure to provide suitable access is a key tool in supporting the growth of regional port economies and providing the conditions to enable a greater rebalancing of the UK economy. 4.4. It is particularly critical to align this investment with port investment. Where an uplift in port capacity can stimulate significant economic growth, the improvement of port access can play an even greater role in an area’s regeneration, such as in Liverpool. 4.5. Road and rail infrastructure investment is imperative to enable Liverpool City Region to maximise the potential of the £1bn investment in SUPERPORT.

Company Incorporation Certificate 2753023 Registered in England and Wales VAT Registration Number 618 5781 12

5. Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs

5.1 In Liverpool City Region this is certainly the case. Extensive study work has been undertaken to understand the potential volume, location and direction of additional traffic flows generated by port development and their geographic reach. 5.2 Various options to address these impacts have been evaluated through a Port Access Study and a high level Port Access Steering Group has been established to take this work forward through a collaborative approach with the Department for Transport, Highways Agency, Network Rail, local authorities, the Port operator and LEP; of such importance is this issue that the City Region included the need for action as part of our City Deal discussions with Government. 5.3 This joint effort will ensure we assess the options, identify actions for infrastructure investment and promote efforts to encourage modal shift to sea and rail to support a carbon efficient freight route. 5.4 The Port Access Steering Group is moving forward by submitting a proposal to access Trans-European Transport Network funding which will provide 50% towards a study to identify the preferred actions to be taken to future proof port access infrastructure. 5.5 We do however require match funding to take our proposal forward. We are working with stakeholders including the Department for Transport, the Highways Agency, Network Rail, Peel Ports and the Local Transport Advisory Group to identify available funding for this study. 5.6 Once complete we will require central Government support to ensure delivery of the necessary infrastructure to maximise the positive economic impact of the port investment and creation of jobs. 5.7 We believe Government should prioritise infrastructure investment which will enhance private sector led port development such as Liverpool2 where it will create greater efficiencies in logistics and with it improvements in productivity and competitiveness of UK businesses. This is certainly the case in Liverpool City Region.

6.1. With the continued rise in the cost of fuel and the need to reduce UK carbon emissions, it is realistic to predict rail traffic will continue to increase in line with expectations, provided adequate investment in capacity and multimodal facilities are actively encouraged. 6.2. In Liverpool City Region the planned electrification and upgrading of the Northern Hub are critical to this. This can be further enhanced through a holistic approach to SUPERPORT infrastructure, through increased port rail terminal capacity, upgrading

Company Incorporation Certificate 2753023 Registered in England and Wales VAT Registration Number 618 5781 12

connectivity to rail linked distribution sites in the City Region and signalling improvements. 6.3. We support the availability of route development funds and suggest that this mechanism is considered to support regional ports in realising their ambition to successfully maximise the potential for moving freight while avoiding increased and avoidable pressure on the road network. 6.4. We support the promotion of rail freight and increases in the capacity of the network to enable and encourage this. However, we similarly support the promotion of short sea shipping to deliver similar benefits with equivalent subsidy. The sea around the coast of the UK has huge unrealised capacity and as such offers a viable and efficient solution which should be exploited for the benefit of the UK. We believe that a consistent approach to supporting both rail and short sea shipping offers great potential in reducing road freight and relieving pressure on the national highway network. 6.5. This will assist the UK as a whole through distributing investment and economic benefit, promoting regional economic development and easing capacity issues. 6.6. Inland shipping offers a significant opportunity to reduce road based freight. Already the Manchester Ship Canal is carrying increasing freight volumes and this is set to increase as investment is made to develop 5 million square foot of warehousing along the inland waterway. This potential and benefit should be actively encouraged by Government wherever possible to include road investment to access the sites along the canal.

7. Are there any regulatory barriers to investment in ports? What could and should be done about them

7.1. Predictions for rail freight show continued growth in the coming years. However we must ensure this confidence in modal shift is not stifled by increased regulation. 7.2. The decision by the Office of Rail Regulation (ORR) to increase the variable usage charge and introduce a new charge for the haulage of coal, iron ore and spent nuclear fuel must be carefully considered economically. 7.3. We advocate a continued focus on supporting modal shift to rail and sea. Reducing operating costs through a modal shift rail subsidy appears at odds with increasing usage charges at the same time.

In summary Liverpool City Region LEP believes that investment in port access infrastructure is of significant economic importance to the UK. However, we believe Government intervention should be prioritised into those schemes that can deliver the greatest economic benefit to the UK, and help to beneficially rebalance the UK economy in line with Government economic policy.

Working transport and economic policy in tandem in this way, will have the greatest return on investment for the UK taxpayer, through delivering greater economic impact from improved productivity and competitiveness of UK businesses.

Company Incorporation Certificate 2753023 Registered in England and Wales VAT Registration Number 618 5781 12

Written evidence from RMT (PA 06)

The National Union of Rail, Maritime and Transport Workers (RMT) welcome the opportunity to submit written evidence as part of the Transport Select Committee’s inquiry into Ports Access.

The RMT organises 80,000 members across all areas of transport, apart from aviation, including 6,000 seafarer, docker and dock side members, mostly working on passenger ferry services from UK ports, and at major UK ports such as Harwich, Hull, Grangemouth and Heysham. RMT also organises around 1,000 workers at rail freight companies and over 14,000 Network Rail staff.

Intermodal freight is the only part of the freight sector to have grown in the past year, and has done so every year since 2002-03.1 It is essential, therefore, that the significant levels of private and public investment currently going in to ports around the UK is accompanied by the development and expansion of rail freight infrastructure, in order to maximise access to the country’s ports network and encourage the continued growth in intermodal freight, particularly between maritime and rail modes.

It should also be noted by the Committee that Network Rail is currently consulting on a transfer of over 250 strategic rail freight sites, from DB Schenker to Network Rail. This is part of an effort by the government to introduce more competition amongst freight operating companies (FOCs) and will undoubtedly have an impact on access to ports for both FOCs and the freight customers they serve and depend upon. RMT has responded to the Network Rail consultation and a copy of that response is also enclosed.

Finally, in terms of the policy areas outlined by the Committee for the purposes of written submissions, RMT fully supports Freight on Rail’s submission to the Committee.

January 2013

1 http://dataportal.orr.gov.uk/displayreport/html/html/79c33859-004c-486b-b752-cd485b1dba96

Written Evidence from Freightliner (PA 07)

1. We are writing in response to your request for evidence for your inquiry into Access to Ports. This is the formal response of Freightliner Group (Freightliner) – representing Freightliner Limited (FLL) and Freightliner Heavy Haul Limited (FLHH). Freightliner is a logistics operator specialising in rail, currently moving 79% of all deep sea containers that are moved by rail in the UK, as well as over 20 million tonnes of bulk goods by rail each year.

2. Rail freight plays a vital role in the supply chain to serve the UK ports that are connected to the rail network. 1 in every 4 deep-sea containers arriving or departing from the UK ports is transported by rail and approximately 25% of all electricity produced in this country is generated by coal delivered on rail (up to 40% in winter). Approximately 75% of this coal is imported from ports.

3. Movement of freight by rail offers considerable environmental and economic benefits over the transport of freight via the road network. Freight trains can move a considerable volume of freight, with each freight train replacing between 40 and 70 lorries (depending on the commodity) in each direction. Rail freight saves: • £772 million per annum in congestion costs1 • £133 million per annum in road infrastructure costs2 3 • £68 million per annum in CO2 costs • Pro-rata 42 road deaths at a value of £78.8 million4

What should be the priorities for improved access to ports, and why?

4. The development of the railway infrastructure through Strategic Freight Network (SFN) as a dedicated funding vehicle for specific freight improvements has been extremely effective to date and is already helping to support growth in use of freight on rail despite the recession. Deep sea container modal share has increased from 17 to 30% in the last 15 years:

Deep sea container Deep sea container modal share 1996 modal share 2011/12 2% sea

17% rail 30% rail

road 68% 83% road

5. Furthermore in the last 10 years, intermodal rail freight growth has increased by 87% despite the recent impact of the recession, this is predominantly the movement of deep- sea containers from and to ports. This growth can at least partly be attributed to the investment delivered through SFN in the current Network Rail (NR) Control Period 4. For example, following the gauge clearance between the port of Southampton and the West Coast Mainline, the modal share to rail increased from 29 – 36% within 12 months.

Intermodal freight moved (billion net tonne kms) Source: ORR National Rail Trends 1.70

1.60

1.50

1.40

1.30

1.20

1.10

6. UK government is investing £380 million in the Strategic Freight Network 2009-14 in England and Wales and a further commitment of £200 million Strategic Freight Network funding in England and Wales and £30 million in Scotland has been announced as part of the High Level Output Specifications for 2014-19, as well as freight benefits being incorporated into named projects such as grade separation at Leicester and capacity enhancements at Ely. This investment is welcomed by the rail freight industry but it should also be considered in the context of the total investments in the railway network, predominantly to benefit passenger capacity of £10.8 billion in England and Wales (£12.2 billion including Scotland). Therefore the investment in the SFN constitutes 1.9% of the total investment in England and Wales in Control Period 5 (2014-19).

7. SFN investment to date has so far been primarily focused on providing the capability on the core intermodal routes between the ports and inland terminals, in the form of gauge clearance to allow 9’6” containers to be hauled on standard wagons. This programme continues until the end of the current Control Period in 2014:

Gauge clearance as at May 2011

Gauge clearance planned for March 2014

8. One lesson that must be learnt for future investments is the need to incorporate suitable diversionary routes in the business case for investments. For example the core route from Southampton to the West Midlands has been successfully gauge cleared but there is no gauge cleared diversionary route from Basingstoke to the West Midlands and it is proving difficult to make a business case for the diversionary route alone. This diversionary route is urgently required as there is a £6 billion investment scheme to upgrade the Reading area and the Great Western Main Line route and without the ability to divert it is inevitable that traffic movements will be lost to road and/or Network Rail will be unable to plan their engineering blockades so efficiently.

9. The SFN funding is also being used to start to invest in network capability to provide the ability to run longer trains. Working hand in hand with gauge clearance projects, these upgrades are important in improving train utilisation and allowing rail to compete more effectively with road. Currently one intermodal train can remove the equivalent of 50 HGV journeys but the ability to operate longer trains only improves this statistic further. Longer trains also make better use of precious capacity on the rail network; both passenger and freight traffic have considerably increased over the last 10 years, and many parts of the rail network are now operating at near capacity as a result.

10. To increase rail modal share out of the ports further, the next phase of SFN investment should concentrate on providing the capacity that is required to accommodate the forecasted growth on these corridors and enable rail to continue to grow its modal share of the market. Whilst the provision of this capacity is essential to allow rail growth to continue, the development of such business cases is not always straightforward, particularly when the measurable economic outputs cannot be guaranteed and at the same time there are often competing objectives to increase passenger services on the same routes.

11. It is important that the planned outputs from investment are actually delivered and therefore that the capacity delivered by SFN schemes is protected until the forecast future freight traffic comes on stream and is not immediately absorbed by additional passenger services. For example, whilst the development of the Felixstowe to Nuneaton route will divert some intermodal services away from the North London line in the short term, these trains are likely to be replaced by services originating from London Gateway once it is fully operational.

12. In addition to capacity, Government investment through the SFN is also required to provide reliable 6/7 day rail access into the ports so that rail freight can offer the same reliable daily service offering to its customers as road can, this is a pre-requisite for many customers wishing to use rail. In practice, this means the development of suitable diversionary gauge cleared routes that will not only make it easier to maintain the service during times of disruption, but also allow Network Rail to maintain the network more effectively and offer operators alternative routes during these periods.

13. The High Level Output Specification (HLOS) announcement made in July 2012 included funding for the electric spine that will provide an electrified route between the Port of Southampton and the Midland Main Line Mainline. There is a need to develop a long term electrification strategy for rail freight which takes account of the commercial tipping point for freight operators, the asset life of freight operators rolling stock (noting that the purchase of new freight electric locomotives will be a decision for the private sector) and includes a strategy of diversions routes and connections to inland rail terminals as well as core routes to connect the major ports and conurbations.

14. Government support both financially and in terms of planning policy could also be important to support the growth of certain bulk traffics, imported via the ports. The biomass market is in an embryonic stage and is an option as a viable alternative fuel to coal, which would make a large contribution to meeting the UK’s legally binding carbon reduction targets set under the Climate Change Act 2008 (a reduction of 34% in emissions 1990-2020 and 80% by 2050). With rail providing the most suitable mode of transport (considering the volumes required to generate the equivalent calorific values to coal) an efficient network must be in place to link the ports and power stations. This means provision of capacity on the network, as the product cannot be easily stockpiled between ship and power station, and furthermore the likely biomass rail network may not perfectly mirror that currently used for coal traffic. Secondly, planning policy must support and not hinder the private sector in developing the necessary handling facilities for the product within the ports.

15. The HLOS announcement of a £200m allocation to the SFN during the next Network Rail Control Period will be allocated to some of the schemes described in this response, although it should be noted that inevitably there will have to be a prioritisation exercise and some important improvements will not be delivered.

16. It is important that investment in programmes such as the SFN are not considered as one off projects but continual programmes that continue support economic and environmental benefits going forward. Prior to 2009 there had been little investment for decades in infrastructure to support rail freight and inevitably there has been, and continues to be a considerable catch up factor in order for infrastructure to be of a reasonable expected modern equivalent.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

17. The current cyclical nature of the NR Control Period process that requires Government investment to be staggered does not lend itself to effective strategic planning and the SFN would be more effective if the funding process could be continual or at least planned over longer periods, a longer term cross-party infrastructure plan could provide considerable economic benefit to the country. The development of a National Policy Statement for the National Road and Rail Network will be important and hopefully go some way to achieving this by framing the investment in rail freight into a longer and ‘rolling’ strategy.

18. The National Policy statement also needs to be joined up and not consider the future needs of road and rail separately in isolation. It is vital that future policies to alleviate road congestion consider the benefits offered by rail on roads where modal shift is a realistic outcome, such as on the A14 for example where the road and rail routes directly compete to link Felixstowe to the West Midlands and North West. A clear strategy in the form of the NPS is likely to accelerate further private sector investment in rail connected warehouse parks (such as the recently announced Radlett project) along with port related strategic rail freight interchanges. Currently there is no national guidance for local authorities to use when trying to balance national benefits and local opposition of schemes.

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

19. In overall terms decision making and planning around the SFN is undertaken at a national level so it is more straightforward if Government’s decisions on funding are made on the same basis, which again links to the importance of the NPS.

20. It has been suggested that the Local Transport Boards are based on the same geographical boundaries as the Local Economic Partnerships (LEP’s). Freightliner has only engaged with one LEP and it is difficult for nationwide companies such as ours to engage with so many local organisations. It is also likely that LEPS, due to their size and local nature are unlikely to have any expertise in rail freight.

21. With the majority of rail freight flows spanning long distances, and likely to cover many LEP areas, the Local Transport Boards need to consider that the benefits of localised investment will be felt in other areas outside their areas of influence, particularly if modal shift is an output of the investment. There is often too much of a focus on the local impacts which can be both negative and positive, e.g. job creation but increased congestion on the local road network. Freightliner would hope that the Local Transport Boards are able to take a more strategic view when considering the potential benefits of rail freight schemes.

22. It is also important that any schemes developed by the Local Transport Boards, designed to benefit rail freight need to be developed with the engagement of the key rail freight stakeholders to ensure that they are effective and deliver value for money.

23. Freightliner also notes the proposals to dissolve some of the management of specific rail franchises in several Passenger Transport Executive (PTE) areas. There is a clear interaction with freight services and it is important that these local bodies recognise the regional benefits that rail freight can deliver when balanced against their inevitable aspirations for improved local passenger services. Up to now engagement with PTEG has been positive and Freightliner hopes that this continues should the devolution process develop further.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

24. In terms of the intermodal sector, for rail to compete effectively with road, it needs to be able to offer the same ease of access between the port and the mainline network. This primarily means gauge capability and capacity so that operators are able to develop cost effective and operationally efficient train paths – as a key dictator is often the availability of loading slots at the port terminal.

25. Freightliner has recently completed its largest ever capital investment at a terminal, by way of its installation of new rail mounted gantry cranes at its Maritime terminal at Southampton. These cranes will deliver a much increased capacity at the terminal and provide the ability to handle greater container volumes in the future. This investment would undoubtedly not have happened were it not for the prior commitment by Government to SFN investment to improve rail access into Southampton.

26. Other important investments made by Freightliner over recent years include new cranes at Manchester and Birmingham terminals, a new more powerful and environmentally friendly locomotive fleet (PowerHaul/class 70s), new wagons to complement the gauge clearance programme and a new IT system that provides our customers with a state of the art paperless booking and delivery system. In total Freightliner has invested in the order of £450 million since 2000, none of which has been subsidised by government.

27. With these factors in mind, investment in both terminal facilities along with rail network capability and capacity can then act as a catalyst to grow rail freight (demonstrated in the recent increase in rail’s modal share from Southampton) and the overall viability of a port.

Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

28. The SFN funding has been predominantly focused on rail routes from the major ports to inland terminals and these are the routes that have generated by far the largest proportion of rail freight growth over the last 10 years. With further and considerable private sector investment at each of the largest 3 deep-sea container ports at Southampton, London Gateway and Felixstowe we would expect the focus in Control Period 5 (2014-19) to continue to be on these core routes.

29. In 2007 the rail industry commissioned MDS Transmodal to develop the forecasts to predict rail freight growth until 2030, these were supported by the Department of Transport and Network Rail as well as the operators and other industry bodies. These forecasts are currently being updated and will be published later in 2013. Latest ORR statistics demonstrate that these forecasts are already being exceeded in a number of areas of the country. For example, the forecast daily freight trains to Trafford Park (the busiest inland terminal) have already reached levels that were not predicted to be reached until 2019.

30. Rail has a growing market share at the two largest UK ports with 30% at Felixstowe and 40% at Southampton achievable over the next few years. Furthermore, the previously mentioned example of the completed gauge clearance scheme out of Southampton grew the rail modal share by 7% within less than 12 months. This statistic clearly demonstrates the effectiveness that the SFN has had during the current control period. The schemes planned for CP5, along with the private sector funded improvements to port rail facilities at Southampton, Felixstowe and London Gateway (due to open in late 2013) will provide an excellent opportunity for rail’s modal share to increase further.

31. Further benefit and modal shift could be achieved if there was longer term commitment to investment in the Strategic Freight Network beyond the constraints of the 5 year Control Periods. A longer term cross-party infrastructure plan would enable further investment and give confidence to potential customers of rail.

32. Further modal shift could be gained over shorter distances. However it remains virtually impossible to compete with road on price over distances of less than 150 miles. Decisions such as an HGV surcharge at Ports to level the playing field with rail (Currently £50 for rail and zero for road), road toll charges, reduced track access charges for freight or an emissions tax on HGV's could provide the environment for shorter distance rail freight journeys to become competitive.

33. The existing Mode Shift Revenue Support (MSRS) grant supports the movements of predominantly containers by rail, where they would have otherwise moved by road. This grant is funded for £19 million per annum until 2015. It offers very high value for money to government at a ratio of approximately 5:1. The continuation of the MSRS grant beyond 2015 is vital to ensure that existing shorter distance container movements remain on rail.

34. A sudden curtailment of the scheme could result in radical restructuring of rail services from the major ports as non profitable services are ceased and customers who no longer have a portfolio of destinations served withdraw contracts from rail operators. The current level of funding could be increased by just a few million pounds per year and considerable benefits could be gained at a ratio of multiples above the cost in securing new flows to rail, which currently move by road. MSRS has been a successful scheme in removing movements from the roads and is a no risk option for government as payments are only made once movements have been made by rail rather than road

Are there any regulatory barriers to investment in ports? What could and should be done about them?

35. Our major concern in this area relates to the 5 year periods through which Network Rail are funded and access charges are set. 5 years certainty is not sufficient to plan investments in assets which have long asset lives, e.g. cranes, locomotives and wagons all have an expected asset life of 35 years. A long term infrastructure plan would greatly assist the private sector in making more investment, which in turn would benefit the economy.

36. The Office of Rail Regulation announced in decision on capping of freight access charges on 11th January 2013 for the 5 years 2014-19. The Variable Usage Charges have been capped at an average increase of 23% however for individual customers the increase could be considerably more, and there are other charges paid that are not included in the cap. Such uncertainty and likely actual increases in charges is creating great uncertainty in the rail freight market. This is unhelpful when there is considerable momentum to further modal shift and potential customers will at best delay their decision to use rail.

37. This is particularly unhelpful in the context of fuel duty freezes announced by the Chancellor in November; fuel duty being in effect the only charges paid by lorries to use the road network. The charges paid by freight operators are far more complex and six different types of access charge currently apply. Such complexity is in our view unnecessary and is creating a barrier to further modal shift to rail.

January 2013 WRITTEN EVIDENCE FROM ASSOCIATED BRITISH PORTS (PA 08)

Key conclusions

• The responsibility to invest in port infrastructure and marine access should continue to rest with the UK ports sector using private sector finance.

• At the same time, public investment should be targeted at road and rail access to ports recognising their central role in driving economic growth.

• Priorities for improved road and rail access to ports should be based on real customer demand since this maximises economic benefits and represents best value for taxpayers.

• Public investment in road and rail access aimed at influencing the port market and regional decision-making on port development risks wasting public money, damaging competition and reducing private investment in ports.

• Increasing the obligations on ports to fund improved road and rail access can reduce the level of private investment in port infrastructure, especially given the need to compete for such investment internationally.

• Rail’s modal share of cargoes moving to and from ports can increase but more investment in the rail network is needed, as exemplified by the significant increase in capacity required to accommodate biomass traffic to power stations.

• Action to tackle regulatory barriers to investment in the UK ports sector includes better impact assessments of new legislation and regulation (e.g. allow stakeholders to scrutinise draft conclusions before final ministerial sign-off and require formal approval of all ministers with relevant responsibilities, rather than a single minister from a sponsor department).

• The Marine Management Organisation should refund applicants the fee it charges for processing marine and harbour consents if it fails to meet a mutually agreed deadline for reaching a decision.

Introduction 1. Associated British Ports (“ABP”) is the UK’s largest and leading ports operator with 21 ports1 around Britain handling around one quarter of the nation’s seaborne trade. Our ports include Grimsby & Immingham; the UK’s largest by tonnage, and Southampton, home to the UK’s second largest container terminal. As well as 21 ports, ABP also owns and operates a major rail hub at Hams Hall in the Midlands.

2. The Coalition Government has identified that export-led growth and re-balancing the economy, whereby the manufacturing sector regains a greater share of economic output, are central components of a sustainable economic recovery. It has therefore never been more important to invest in access to UK ports which handle some 95% of the nation’s trade in goods. ABP very much welcomes the opportunity to submit written evidence to the Transport Committee’s very timely inquiry into access to ports.

What should be the priorities for improved access to ports, and why?

3. UK major ports are largely in the private sector and operate on a commercial basis. Investment in port infrastructure and marine access to ports is usually undertaken by port operators in response to customer demand. Over the past 5 years ABP alone has invested over £200 million of private money in new port infrastructure and facilities. By 2015 ABP aiming to deliver further capital expenditure totalling some £500 million. Whereas ports are usually responsible for investment in port infrastructure and marine access, local and national government has, typically, invested in road and rail access to ports based on organic growth in port traffic or new port development.

4. Government has recognised that targeted public investment in road and rail access to ports which responds to customer demand helps deliver:

• maximum benefits to the wider economy and environment; • a competitive ports sector able to fund port infrastructure without public subsidy; and • best value for the taxpayer. ABP therefore believes that priorities for improved access to ports should follow real customer demand.

5. The Department for Transport (“DfT”) has already carried out extensive work to help identify where customer demand may require improvements to port access. Most importantly, “Delivering a Sustainable Transport System” (2008)2 identified key international gateways, including ports, and strategic national corridors. This remains a robust basis for helping establish priorities for improved access to ports.

6. Improved access to ports can also be prioritised according to government-led local or regional regeneration objectives. However, it is important to recognise that this may result in public money being invested in access to ports where there is insufficient customer demand to achieve desired economic, social and environmental benefits. It is also inconsistent with encouraging free and fair competition between ports; ports best serve the economy if they are more focussed on competing for customers rather than competing for government money (within or without the port estate). Gearing the prioritisation of improved access to ports around government-led regeneration objectives would also increase political uncertainty and therefore compromise the ability of the private sector to deliver the long term investment which the port industry needs.

7. The above issues of course point to potential conflict with current ports policy, which is intended to support fair competition and customer-led port development. Government should be aware that the remaining credibility of UK ports policy is currently under threat; it must avoid a drift towards politically driven decision-making and prioritise investment in road and rail access based on sound economic principles.

8. It should be noted that a customer-led approach to prioritising improved access to ports can of course still help deliver local and regional regeneration objectives and is in fact complementary to effective regeneration policy.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

9. ABP hopes that further significant delay in the publication of the National Policy Statement for National Road and Rail Networks (“the NPS”) can be avoided. There are a number of key port access issues which the NPS should address in response to growing customer demand, including:

• Increasing rail capacity to accommodate biomass traffic from the Port of Immingham to major power stations. It is estimated that by 2020 demand for biomass will require an additional 5000 trains per year on the route connecting the port to customers such as Drax. Demand for biomass will also need improvements to the Port of Hull such as the installation of automated signalling on the connection to the Hull branch line.

• Upgrade the A63/Hedon Road connection to the Port of Hull, which it is understood is prioritised for investment post-2015. The road link is currently running at capacity and therefore there is the potential that future investment opportunities will be constrained. The upgrade is particularly important to support the development of the supply chain for the Green Port Hull project to construct a Siemens offshore wind facility.

• Gauge enhancement on the routes to the Ports of Immingham and Hull will increase rail’s modal share of container traffic by providing the capability to accommodate high cube boxes on standard wagons. Electrification of the rail link from Hull to Selby also offers significant benefits yet the scheme is not currently short-listed.

• Further capacity on the rail links to the Port of Southampton and improvement of junction 9 of the M3.

• Gauge enhancement on rail links connecting South Wales and improvements to the M4.

10. In general terms, ABP hopes that the NPS will build on:

• the Eddington Transport Study (2006) which highlighted the importance of maintaining and improving access to key international gateways for supporting economic growth; • the key international gateways and strategic national corridors the DfT identified in “Delivering a Sustainable Transport System” (2008); and • ongoing development of the Strategic Rail Freight Network.

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

11. ABP works closely with key partners at a local level to help ensure that investment in access to ports matches the needs of customers and therefore best supports the wider economy and sustainable transport goals. ABP’s experience of Local Transport Boards is positive.

12. It is important that the need to support freight, as well as passenger, is fully recognised by Local Transport Boards and other bodies. One useful development in Wales is the re-establishment of the Wales Freight Group by the Welsh Assembly Government to inform transport strategy.

13. In some instances it can be important to consider transport investment priorities from a regional as well as local perspective. The abolition of the Regional Development Agencies has removed the formal institutional framework which previously facilitated this. Going forward it would be beneficial if alternative mechanisms can be established to further aid transport investment appraisal across local boundaries when this is appropriate.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

14. Investment in road and rail infrastructure should be based on real customer demand which can be demonstrated by organic growth in port traffic over time and/or planned new port infrastructure developed and funded by port operators. Investment which is targeted at serving customer demand is the most likely to deliver the best return for

taxpayers in terms of economic growth. This is the rationale which underpins current UK ports policy3.

15. Investment in road and rail infrastructure can influence the market and regional decision-making on port development but the extent to which it may do so will vary. For example, as well as factors such as hinterland access, the flow of deep sea containers into the UK from the Far East is influenced by the need to minimise deviation from the principal shipping lanes through the English Channel to continental Europe. Investing in road and rail links with the intention of diverting significant deep sea container traffic away from southern ports is therefore unlikely to succeed. This illustrates one of the dangers of government seeking to “pick winners”, which was highlighted in the Eddington Transport Study (2006).

16. A government-led rather than customer-led approach to investment in road and rail infrastructure which aims to influence the ports market and regional decision-making on port development will also undermine healthy competition between ports. The concomitant political uncertainty will inevitably reduce the wider ability of the private sector to deliver port infrastructure which is fit for purpose and discourage private investment.

Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

17. Ports do not generate traffic; businesses located throughout the UK generate port traffic. Ports are international gateways which serve the demand created by customers and allow the economy to function, develop and grow. The UK economy benefits from port development which follows customer demand and which can be funded by the private sector, thereby removing from the taxpayer the significant burden of delivering modern and efficient port infrastructure. Decisions by government on road and rail access supporting port development need to take into account these wider economic benefits.

18. Over recent years government has asked ports to fund an increasing share of road and rail access improvements, in some cases relating to infrastructure very remote from the port itself. There are questions as to whether this approach adequately reflects the wider economic benefits of ports and port development. It is right that

ports are expected to fund improvements in marine access and port infrastructure but these investment decisions will be influenced by any wider costs which are imposed by government. As more additional obligations are placed on ports to fund improved road and rail access, the greater the risk of choking off private investment in marine access and port infrastructure. This risk is intensified by tough competition for international capital and the relative cost of investing in UK port infrastructure compared to competing nations is therefore crucial; in continental Europe, for example, improved road and rail access to support port development is funded by the state.

19. Further investment in the UK rail network can support an increase rail’s modal share of ports traffic. Prior to the upgrade of the rail link from the Port of Southampton to the West Midlands so that high cube containers can move on standard rail wagons, rail’s modal share of containers moving to and from the port steadily declined to around 25%, over 10% lower than its historical peak. Since the enhancement was completed in February 2011, rail’s modal share has already recovered to around 35%. The planned overhead electrification of the route to the West Midlands and beyond to Yorkshire (“the electric spine”), scheduled by Network Rail to take place during 2014-2019, will further increase capacity and rail’s modal share, delivering even greater environmental benefits.

20. The example of the Port of Southampton demonstrates that ambitious targets for increasing rail’s modal share can be achieved but not without the necessary investment to deliver a rail network with improved capacity and capability. Much more investment is needed in future to ensure the rail network can maintain and grow its modal share. One example is the urgent requirement to increase capacity on the routes connecting the Port of Immingham to major power stations so that more biomass can move by rail. Drax, for example, has announced plans to fully convert three of the plant’s six boilers to 100% biomass in 2013. It is estimated that this and other planned biomass conversions will require extra capacity to accommodate an additional 5000 trains per year by 2020, around 50% more than the current total.

21. The ability to increase the modal share of traffic transported by inland waterways is particularly limited by the size and capacity of the infrastructure. The scope for removing traffic from roads via coastal shipping is far greater, mainly because of the larger economies of scale that can be achieved.

Are there any regulatory barriers to investment in ports? What could and should be done about them?

22. There are many regulatory barriers to investment in the UK ports industry. Potential investors are confronted by a continuously expanding vista of complex and costly regulation, which can be flawed and unnecessary. As the cost of undertaking an investment in port infrastructure and of carrying out ongoing port business rises, the attractiveness of investing in ports diminishes. The failure to pay proper attention to this simple trade-off is perhaps the chief underlying cause of regulatory barriers to investment, which often arise from:

• legislation (or components of legislation) not underpinned by a robust rationale and/or which duplicates or overlaps existing regulation; and • lack of competency in the implementation and/or administration of regulation.

23. In the UK ports sector, the Marine and Coastal Access Act 2009 (“the Act”) illustrates both types of failing. The Act introduced marine planning and Marine Conservation Zones (“MCZs”) despite an existing regulatory regime designed to meet stringent environmental and sustainable development objectives. Defra’s own Impact Assessment4 of the Act (“the Impact Assessment”) estimated that the costs to Government alone of marine plans for English and Welsh territorial waters and UK offshore waters would be £101 million over 20 years. Whilst increased certainty for developers was cited as a key benefit of marine planning, plans will be reviewed every 3 years and the process of full plan replacement will begin every 6 years, a regime entirely inconsistent with potential investors’ need to take a long term view.

24. The Impact Assessment also estimated that the cost to industry of MCZs would be between £440 million and £1.26 billion over 20 years (the cost to Government was estimated at circa £50 million). This was balanced against alleged efficiency savings to marine developers totalling £8.8 million to £17.7 million over the same period. The

main component of the anticipated benefits of the Act was marine conservation benefits valued at between £8.6 billion and £19.5 billion, although the Impact Assessment notes that there is “considerable uncertainty” regarding the accuracy of this estimate.

25. The Act also created the Marine Management Organisation (“MMO”) which, as well as implementing marine planning and MCZs, assumed responsibility for consenting works associated with port developments from DfT. Much of the knowledge and expertise built up by DfT over the years was lost due to personnel changes during this transfer. It is disappointing and frustrating that the MMO has seriously underperformed in this respect. The planned expansion of the container terminal in the Port of Southampton involves an investment of £150 million of private money. Despite being an uncontentious development, the MMO took 3.5 years to grant consent for the berth works and approval for the capital dredge is still awaited after the application was first submitted over 4 years ago.

26. The Marine and Coastal Access Act 2009 is not an isolated case of legislation giving rise to barriers to investment. The Carbon Reduction Commitment, for example, has placed a liability on ports to pay for the carbon emissions of port tenants over which they have no direct control and the industry is worried about slippage in the Government’s commitment to address this issue. The UK ports industry also continues to face threats of poor legislation flowing from the EU. At the moment the EU Concessions Directive and potential for a Port Services Directive are both causing serious concern. By imposing sclerotic bureaucracy on the sector, both initiatives threaten to undermine the flexibility and competitiveness of UK ports.

27. There are a number of generic measures which can be taken to help begin to tackle regulatory barriers to investment over the long term. It is clear, for example, that changes are needed to the way in which Government carries out its impact assessments of proposed new legislation and regulation, which should not be regarded as just ‘tick box’ exercises. Some useful aspects to improving impact assessments might include:

• The estimated costs and benefits of new regulation should be weighted to reflect the degree of certainty around the data or evidence upon which they are based. There is a need for sensible caution about monetised valuation of intangible benefits.

• There should be an expanded and formalised opportunity for industry and other stakeholder representatives to directly support ministers by interrogating impact assessments before they are finally signed off. Present consultation arrangements do not allow for adequate scrutiny of impact assessments’ provisional conclusions.

• There should be a requirement for Government to ask stakeholders identified in an impact assessment to publicly record whether they agree or disagree with its conclusions, citing any supporting evidence.

• Impact assessments should be signed off by all ministers where new legislation or regulation will impact their areas of responsibility, not just a single minister from a particular sponsor department. This is one way of cementing proper cooperation and coordination between government departments and securing effective joined up government.

28. In terms of tackling regulatory barriers to investment by improving the delivery of regulation, one of the most important measures is to fully recognise the shared responsibilities of both government and applicants within the marine and harbour consents process. At the moment, applicants are charged by the MMO to cover the full cost of the consents process and are expected to deliver the correct information to the MMO in a timely manner. If an applicant has complied with these obligations it would be reasonable for the MMO to refund the costs of the application if the MMO does not deliver a decision by a mutually agreed deadline. Paper performance targets without any material sanction in the event of failure are not the most effective driver for improving efficiency and raising levels of customer service.

Annex A

Written Evidence from Major Ports Group (PA 09)

Summary

1 The UK Major Ports Group welcomes the Transport Committee’s decision to set up an inquiry into access to ports. It is our strong view that good transport infrastructure plays a vital role in the development of the UK’s economy. While ports themselves are financed through private investment and do not seek any financial help from the taxpayer, road and rail links to and from ports are rightly part of the publicly financed national transport infrastructure system. The importance of these international gateways was recognised in the Eddington report and schemes to enhance capacity and remove bottlenecks should continue to receive priority in DfT’s capital expenditure programme. Continued investment in connections to ports will promote economic recovery, not hinder it. It is also important to recognize the potential role of coastal shipping and to treat this equally with other modes.

Introduction

2 UKMPG is one of two associations representing ports in the UK. Our 9 member groups handle over 70 percent of the UK’s international trade by volume, and therefore play a significant role in supporting the UK economy and promoting exports. UK ports are privately financed and do not seek any financial help from the taxpayer.

Importance of ports to UK economy

3 The independent economic consultants Oxford Economics have produced a new report on the economic impact of the UK ports sector in 2011, updating their previous studies which used 2007 and 2009 figures. Their data shows that the ports sector consistently outperforms most other sectors for employment and productivity ‐ for example, between 2009 and 2011 direct employment in ports rose by 5% to 117,200 , while overall UK employment fell by 0.4%. The key measure of labour productivity, GVA (Gross Value Added) per worker, averaged over £67,400 in the ports sector, nearly 40% higher than the UK‐economy‐wide average of £48,400.

4 Overall this latest report shows the ports sector continuing to improve productivity and to make a significant contribution to the UK economy despite testing trading conditions. The maritime sector as a whole supports over half a million jobs in the UK economy and contributes nearly £32 billion to UK GDP, with the ports sector accounting for well over half of this. These figures, together with the fact that 95% of the country's international trade moves through ports, show how vital ports are to the UK's economic performance.

Current ports investment programme 5 Annual investment in upgrading and developing port facilities has historically been running at £200‐300m per year and this is increasing as several large development projects (which have already received planning approval) are taken forward. The private sector has shown confidence in the future of the UK ports sector with • a major expansion at Felixstowe the UK’s largest container port now completed, • a large new container port on the Thames at London Gateway due to open in late 2013, • a major capacity enhancement at Southampton now underway and • financing in place for a new container port at Liverpool.

6 Additionally ports are playing an important role in the development of renewable energy, particularly offshore wind and biomass, supporting private investment to be put in by renewable energy developers.

Government’s policy on links to ports

7 Access to ports featured strongly in the previous Government’s policy on promoting infrastructure. The ports sector gave a strong welcome to the transport study by Sir Rod Eddington published in December 2006. We were particularly pleased to see the report’s recognition that, given the international nature of the UK’s economy, good links to international gateways such as ports were crucially important, offered a high rate of return and should be a priority area for future DfT investment. We were also pleased that the previous Government acted quickly to implement Eddington’s findings through: − setting up a new streamlined planning system for major infrastructure projects through the provisions of the Planning Act 2008; − putting major ports at the centre of the strategic transport corridors set out in the white paper “Delivering a Sustainable Transport System”, published in November 2008; − bringing forward several major road and rail projects improving links to ports under the Transport Innovation Fund, Strategic Freight Network and accelerated Highways Agency programmes.

8 The present Coalition Government has yet to set out a comprehensive position statement on transport infrastructure priorities. The promised national policy statement on national (road and rail) networks has been delayed. UKMPG assumes therefore that the previous Government’s policies are being rolled forward at least for the time being. This policy vacuum is a little disturbing given that important decisions are to be taken shortly on the DfT capital programme for the period beyond 2014/15.

9 UKMPG notes that as part of the Government’s localism agenda, regional spatial strategies have been abolished and Regional Development Agencies replaced by local enterprise partnerships. We look to the Government to ensure that strategic transport priorities are secured through the emerging successor arrangements and that improving local road network links to ports will continue to be an investment priority (including a commitment that such access improvements will be a priority area for the new Local Transport Bodies). For their part, ports will continue to work closely with LEPs, Local Transport Bodies and other key stakeholders so that there is a good overall understanding of ports’ future development plans, bearing in mind the need to react quickly to changing market circumstances. Port masterplans can have a role to play here, though in line with Government guidance it must be up to individual port authorities to determine whether masterplanning represents a good use of time and resources in the light of local circumstances.

10 One major cause of delay for port investment schemes and associated connecting has been the processes needed to comply with EU Habitats legislation. The Coalition Government has reviewed the implementation of the legislation and is taking steps to reduce unnecessary bureaucracy and to improve procedures. While we welcome this, the improvements to date are fairly marginal and major reductions in time and cost are only likely to take place if there are changes to the underlying EU legislation.

Delivery issues

11 A number of road schemes which are of particular benefit to ports have been taken forward in recent years. However a number of other schemes have been deferred because of spending pressures. Rail connections to ports have fared somewhat better. A number of schemes are nearing completion or have been completed over the last 5 years including capacity enhancements (ie passing loops etc) and gauge clearance (to accommodate modern 9’6’’ high cube containers) on East and West Coast main lines and connecting links from several major container ports (Southampton, Felixstowe, Tilbury, Liverpool, Teesport and the new port being developed at London Gateway). There have also been a series of improvements to facilitate rail movement of coal and other bulk traffic in the Humber area.

12 Ports are making a financial contribution to many of the above schemes though our strong view is that improvements to the national infrastructure should be financed through the public purse (see para 14 ‐16 below).

13 Coastal shipping can offer an attractive alternative to road and rail over longer distances. It is already well developed for transport of bulk materials where it accounts for around 20% of the total UK market for these products. However coastal shipping is less well developed in other sectors such as containers and roll on/roll off traffic. The industry is now taking steps to improve the marketing of coastal shipping through the Freight by Water website and modal switch programme run by the Freight Transport Association. However the Government needs to play its part by ensuring that the environmental grant support which is currently payable to rail freight operators is also available for coastal shipping so that there can be fair and equal competition between the modes.

Financing 14 Good connecting links to and from ports are vital if port capacity is to be used to best effect. Until relatively recently UK policy was that connecting infrastructure was planned by, provided for and paid for by the state, as in other EU countries. However some 8 years ago the previous Government started requiring port developers to make a financial contribution to infrastructure links as a condition of development planning approval. Negotiations were conducted ad hoc without reference to any supporting policy framework. The consequence has been to add significantly to the overall costs of the developments in question, reducing their viability.

15 In late 2008 the then Government introduced guidelines on financing transport infrastructure which had the effect of making port developer contributions to essential connecting infrastructure standard practice. We do not accept that this should be the case. As well as running counter to the direction set out in the Eddington Report it reduces the relative attractiveness of UK ports for international finance which could result in future expansion schemes not going ahead. UK ports which compete for international traffic could also lose out against competitor ports who do not have to pay for connecting infrastructure.

16 We remain strongly of the view that infrastructure links to and from ports should be a matter for public investment. If there is a need to generate additional finance for the road programme, UKMPG’s view is that the right way of achieving this is through universal road tolling. We note that the present Government are beginning to show more interest in possible road tolling options.

What needs to be done?

17 The next transport spending review and the forthcoming Control Period 5 (2014‐2019) determination for the rail industry are an opportunity to address remaining gaps in the network of road and rail links to ports. For rail these gaps include

o Capacity enhancements on Felixstowe to Nuneaton route (connecting Felixstowe to West Coast main Line);

o Gauge enhancements on Bristol to London and Birmingham routes;

o Completion of a diversionary freight route from Peterborough to Doncaster to relieve pressure on the ECML;

o Gauge enhancement on the TransPennine route;

o Additional capacity from Southampton;

o Electrification of key routes affecting S Wales ports, Bristol, Southampton, London Gateway, Felixstowe

o In addition several UKMPG ports are looking at handling biomass traffic which, if planned investments go ahead, is also likely to require investment in the rail freight network.

We are pleased that several of these schemes are either already due to be addressed in CP4 or are proposals in Network Rail’s strategic business plan for CP 5 (2014 ‐19). We hope that ORR and the Secretary of State will reach a positive decision on these aspects of the SBP.

18 For road the main gaps are

• Access to Immingham (A 160 and A 180 improvements)

• Access to Southampton – improvement of junctions 9 and 14 of M3

• Access to Liverpool – A 5036 improvement scheme

• Access to Felixstowe – A 14 improvements

• Link from the M6 to the port of Heysham

19 For coastal shipping a revision to current environmental grant arrangements needs to be made so that there is equivalent financial support for rail freight and for coastal shipping.

Severn Barrage proposals

20 The Energy and Climate Change Committee is currently carrying out an inquiry into proposals for a Cardiff‐ Weston barrage across the Severn Estuary. If such a scheme went ahead it would profoundly affect access by sea to the port of Bristol and to two ports operated by Associated British Ports in South Wales. The Bristol Port Company and ABP have submitted written and oral evidence to the Energy and Climate Change Committee explaining the serious consequences for the ports in question and also for the national and local economy, and the potential waste of existing infrastructure resources. The Committee has also received detailed evidence about the highly adverse environmental effects of such a barrage. UKMPG hopes that the Committee will end current uncertainty by concluding that this barrage scheme should not proceed.

Conclusion

21 There needs to be a clear statement of overall Government policy confirming the importance of good access to the UK’s international ports with schemes prioritised on the basis of economic appraisal using DfT’s Webtag Transport Analysis Guidance methodology so that schemes are selected because of their economic value not their political attractiveness. The 2008 guidelines for transport infrastructure financing which serve to discourage port investment should be withdrawn.

Specific issues raised by Committee ‐ (a) What should be the priorities for improved access to ports, and why? Eddington principles on the importance of access to international gateways need to be firmly restated by the present Government. The Highways Agency, Network Rail and ports should continue to work closely together to ensure that access related schemes are brought forward in line with port development proposals set out in port masterplans and elsewhere.

‐(b) Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where? The lack of a clear national statement on access to ports is leading to some uncertainty about what the Government’s priorities are for the forthcoming spending review

‐ (c) How satisfactory are the current and proposed decision‐making structures, including Local Transport Boards? The new post regional structure for decision taking on local transport schemes is complex and not easy to understand. The timetable for setting up Local Transport Bodies is extremely tight and we question whether they will have made sufficient progress to reach meaningful decisions on prioritizing major local schemes in their areas for 2015 and beyond by April 2013. A clear national statement emphasising the importance of access to ports would be helpful here.

‐ (d) To what extent can investment in road and rail infrastructure influence the market and regional decision‐making on port development? Decisions on new port infrastructure are matters for ports themselves as the Government has recognised in the national policy statement for ports. In deciding on schemes, ports and investors will clearly have regard to the quality of the connecting infrastructure. If ports have to pay for connecting infrastructure this will reduce the viability of the scheme and may result in much needed investment not going ahead.

‐ (e) Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs? The national policy statement for ports contains clear guidance on how traffic and wider development aspects should be taken into account in planning decisions on port development schemes. In bringing forward development schemes ports will have worked closely with local authorities, the Highways Agency, Network Rail and others to ensure that consequential effects on other transport users and on local communities are properly addressed.

‐ (f) How realistic are current assumptions about rail's modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port‐ related road freight? Ports already account for more than 50% of total rail freight traffic. Rail container traffic has been growing quickly (11% increase in 2011 in a flat market): some container ports are achieving more than a 30% rail market share. If bottlenecks continue to be removed this level could increase further. Coastal shipping is currently being held back by lack of customer awareness (being addressed by industry) and by lack of environmental grant funding equivalence with rail ‐ (g) Are there any regulatory barriers to investment in ports? What could and should be done about them? Some planning barriers have been addressed but more needs to be done to speed up the planning process and also associated licensing regimes. There is scope for introducing clearer time limits and ensuring that public authorities are properly resourced for carrying out their statutory functions. We are concerned about the possibility of new EU ports legislation which could introduce unwelcome additional bureaucracy and costs for UK ports.

January 2013 Written Evidence from Peel Ports (PA 10)

Overview

1. Peel Ports welcomes the Transport Committee’s decision to set up an inquiry into access to ports. It is our strong view that the success or otherwise of a port is inextricably linked to the ability for freight to be moved in or out and therefore surface access (be it road or rail links) inland waterway and coastal shipping are of paramount importance. It is therefore disappointing that the Department of Transport have not as yet issued the Draft NPS relating to national networks (strategic roads and railways). We have previously expressed our concern that it was inappropriate to decouple transport considerations from Ports Policy, with the Ports NPS being adopted in isolation in January 2012.

2. It remains the opinion of Peel Ports that there should be a single freight policy covering all modes and not just road and rail. Such a policy should cover the total freight journey from port of arrival to destination of use of the cargo for imports and the reverse for exports.

3. While ports themselves are financed through private investment and do not seek any financial help from the taxpayer, road and rail links to and from ports are rightfully part of the publicly financed national transport infrastructure system. The importance of these international gateways was recognised in the Eddington report and schemes to enhance capacity and remove bottlenecks should continue to receive priority in DfT’s and Network Rail’s capital expenditure programme.

4. The emphasis of Government policy appears to be based around terrestrial access to ports be that road or rail linkages. However, in the absence of an overall freight policy for the UK the significant opportunities that coastal shipping and inland waterways can offer do not feature prominently enough in our opinion. It is important to recognize the significant potential for water freight solutions and to treat this equally with other modes. This is particularly so in the light of the subsidies enjoyed by the rail freight sector, and which can have the effect of distorting the market and placing water freight solutions at a competitive disadvantage. Furthermore, there are significant benefits in greater utilisation of coastal shipping, as this form of transport does not contribute to UK road or rail congestion or costs.

5. In identifying the Port of Liverpool as a “national” port forming part of the “Strategic National Corridors” we feel that surface access enhancements should be treated at a national level and not be devolved into a local issue with uncertainty over funding and delivery. We remain unconvinced that the consideration of strategic transport interventions being considered at a local level is in the best interests of the major English ports.

Peel Ports

6. Peel Ports Ltd is the second largest port owner and operator in the United Kingdom, handling some 65 million tonnes cargo per annum. Our operations include upon the Mersey: The Port of Liverpool and The Manchester Ship Canal; the Lancashire Port of Heysham; upon the Medway: the Ports of Sheerness and Chatham Docks; in Scotland, upon the Clyde: King George V Dock (Glasgow), Greenock, Ardrossan and Hunterston, and with terminals in Dublin and Belfast.

7. Peel Ports Ltd is privately owned with ambitious investment plans identified for the next decade amounting to some £1 Billion of capital investment on port infrastructure projects. Additionally we continue to work in partnership with a number of our port tenants many of whom are blue chip international operators such as Essar, Cargill, European Metal Recycling, Tate & Lyle, and Scottish Power in terms of their current and further additional private sector investment plans.

8. The combined volumes of the Mersey Ports (Port of Liverpool and The Manchester Ship Canal) are some 40 million tonnes of cargo. This volume of cargo generates some 16,000 shipping movements per annum. The Mersey Ports are the most diverse range of cargoes compared to any other major estuary other than the Thames in the UK. Significantly the North West represents the largest container generating region outside of London and within a 125 mile radius has the largest concentration of distribution and manufacturing activity and the largest concentration of population (see attached plan).

9. In handling some 40 million tonnes of cargo, the Mersey Ports are the fourth largest port complex in the UK handling a greater tonnage than the ports of Southampton, Felixstowe and Dover. We believe the Mersey Ports have not benefitted to the same degree in terms of the road and rail improvements implemented to serve these Greater South Eastern ports.

10. In recognition of the increasing size of vessels (notably those employed on the global container routes) Peel Ports are developing Liverpool2, a Post Panamax Container Terminal upon the Mersey Estuary. The amalgamation with The Manchester Ship Canal and further projects thereon – Port Wirral, Port Bridgewater, Port Ince, Port Warrington, and Port Salford results in a unique “all water” freight solution stretching for 44 miles at the heart of the UK and Britain’s richest cargo creating and consuming region outside London.

11. A barge service linking the deepwater Port of Liverpool and Irlam Container Terminal on The Manchester Ship Canal was launched in October 2007 providing dedicated water freight capacity, thereby alleviating road congestion and contributing to cutting carbon emissions. The volume of containers moved has increased five fold since inception with the service removing 13,000 container journey’s from the strategic road network in 2012. The operation has been supported by a Mode Shift Revenue Support (MSRS) grant of £1.91 per container, helping to mitigate its early life trading loss.

12. In our submissions we have a number of concerns where we believe matters in respect of Access to Ports ought to be more fully assessed by Government. In

announcing the Inquiry on 6th December 2012 the Committee advised they would like to hear views on the adequacy of access to ports, current and planned, and the likely consequences of Government policy in this area. In particular:

What should be the priorities for improved access to ports, and why?

13. The Port of Liverpool (in conjunction with The Manchester Ship Canal) is one largest port complexes within the UK with the River Mersey the third busiest in terms of shipping movements. The Government have previously consulted upon and designated a number of “Strategic National Corridors” indicating the core road and rail connections to the largest ports (and airports) in England, with connections to the devolved administrations. The Port of Liverpool has been appropriately identified upon the network, and in our opinion through an enhanced role for coastal shipping and the greater utilisation of The Manchester Ship Canal is able to provide a greater role in terms of sustainable distribution thus relieving pressure on the strategic road and rail networks of the UK.

14. With a number of consents already in place for new and expanded port facilities in the Greater South East, with further in the pipeline, a fundamental question arises about the role of the Mersey Ports (and other Northern ports) and the capacity they could have to take the strain off and alleviate congestion within the South East region. This is particularly so when in excess of 50% of containers imported through South Eastern ports are bound for destinations in the Midlands and northwards. In our opinion the continued reliance upon the Greater South Eastern ports will inevitably result in increased congestion upon the strategic road and rail network, and place further pressure upon the Government to fund and implement costly surface access solutions.

15. Government should take steps to prioritise the use of coastal shipping and inland waterways over road and rail for moving cargo. An increased role for coastal shipping in moving cargo from South to North would provide significant relief to an already congested strategic road and rail network. This would have an additional benefit in creating additional capacity for passenger growth upon the strategic rail network.

16. However, in order to properly realise the offer within the North West and Mersey Ports there are a number of road and rail improvements that need to be expedited as follows:

• A5036T Access to Port of Liverpool Highway Improvement; • Re-instatement of Canada Dock Freight Line (Port of Liverpool); • Re-instatement of Birkenhead Docks Freight Line; • Freight Line connections to Port Ince, Port Warrington, and Port Salford.

17. The above initiatives would be reasonably regarded as offering excellent sustainability benefits and in cost terms would represent a fraction of the cost of some of the schemes that have hitherto been implemented elsewhere within England.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

18. The production of the National Networks NPS is significantly overdue and has been decoupled from Ports Policy. In our opinion the lack of a clear national statement on access to ports is creating uncertainty about what the Government’s priorities are and indeed where future financial resources should be appropriately allocated.

19. It is our considered opinion that access to ports should not relate solely to terrestrial access (road and rail), but should also embrace an enhanced use for coastal shipping (and inland barge) as part of a fully integrated freight strategy for the UK. The lack of a national freight policy leads to ports infrastructure being developed in suboptimal areas for road and rail networks, resulting in a consequential requirement for significant investment in the strategic road and rail network.

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

20. The relatively recent abolition of Regional planning and transportation structures has resulted in a new emphasis upon “Localism” with decision making being devolved to local level – be that through Local Authorities, Local Enterprise Partnerships, and Local Transport Boards.

21. By their very nature ports exist at a local level but more significantly operate and contribute to regional and national competitiveness. For the same reason we do not regard transportation as being a local issue, as often a ports attractiveness is dependent upon its regional and national connections. At a local level opinions can be parochial and would not necessarily adopt a more strategic outlook. We therefore remain unconvinced that the consideration of strategic transport interventions at a local level will result in more certainty and more timely delivery of transport interventions.

22. In identifying the Port of Liverpool as a “national” port we feel that surface access enhancements should be treated at a national level and not be devolved into a local issue with uncertainty over funding and delivery. The transport “bottlenecks” be they road or rail arise closest to the Port, and although there may be some short- term relief during the current economic downturn, congestion and journey time unreliability are likely to get worse again as business expands and the Liverpool2 port expansion comes on stream from 2015.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

23. The Ports NPS confirms the Government’s longstanding position in that “The UK ports sector is the largest in Europe, in terms of tonnage handled. It comprises a variety of company, trust and municipal ports, all operating on commercial principles, independently of government, and very largely without public subsidy” (Para.3.2.11). However, it is beyond question that significant amounts of public sector funding have been and continue to be directed into road and rail improvements in the Greater South East providing an indirect subsidy to a number of ports, and thereby providing such operators with a competitive advantage. Such investments have the effect of contributing to unnecessary and unsustainable long distance road and rail freight journeys.

24. In terms of the progression of new port expansion schemes, ports and their investors will clearly have regard to the quality of the connecting road and rail infrastructure. If ports are going to be expected to contribute financially towards the delivery of surface access connections this will reduce the viability of the scheme and may result in significant private sector investment not going ahead. UK ports which compete for international trade could also lose out against competitor EU ports whose countries often publically fund and deliver connecting infrastructure.

Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

25. There are previously consented schemes (notably for container port expansion) at a number of English ports. These approvals remain extant and in a number of cases works are being or are about to be progressed (eg Felixstowe, Southampton, London Gateway, and Liverpool).

26. In terms of any new port expansion projects that may come forward, the National Policy Statement for Ports (January 2012) , Marine Policy Statement (March 2011), and the National Planning Policy Framework (March 2012) provide the relevant advice in terms of how traffic and wider development aspects should be taken into account by the decision maker.

27. In bringing forward expansion projects, Peel Ports are well versed in ensuring relevant issues are properly identified in the preparation of Environmental Impact Assessments and we work closely with local authorities, transport agencies, and other statutory and non-statutory consultees. Through the publication and consultation upon our Mersey Ports Master Plan (June – September 2011) we have ensured that local communities are fully informed of our port expansion aspirations, and we continue to maintain a dialogue with all interested parties.

28. Whilst sufficient account is taken of the impact of port development on local road networks, we consider insufficient account is taken in relation to the impact on the national strategic road network, for example the South to North flows on both road and rail from ports in the South of the UK to regions in the North.

29. We believe the development of a national freight policy that considers all modes of transport (including coastal shipping) and their relative contributions to the effectiveness of the movement of goods is required to best facilitate the reduction in overall port-related road traffic.

30. In this inquiry, we expect the issue of congestion on the strategic road and rail networks will be raised. This congestion not only contributes to our carbon emissions, but additionally its drives supply chain inefficiency and the resulting costs to UK businesses that trade internationally. Northern ports are relatively uncongested and through an enhanced role for coastal shipping present an opportunity for Government to significantly reduce freight’s reliance on the strategic road and rail networks without the need for significant infrastructure expenditure to relieve congestion

31. Current assumptions for both rail freight and road freight growth are generally based upon port traffic ratios and take no account of the potential impact of new developments, such as Liverpool2 and The Manchester Ship Canal as a water-fed logistics hub, along with the role that other Northern ports can play in the development of coastal shipping. As such, we believe the assumptions for future traffic upon both the strategic road and rail networks are often overstated, and could result in unnecessary expenditure upon infrastructure.

32. In excess of 50% of unitised cargo that enters the UK’s southern ports is destined for the northern half of the UK, with a single-leg journey in excess of 200 miles on the strategic road or rail networks. By utilising the ports closer to the destination or origin of the cargo, these journey distances can be reduced by more than half. By way of an example, we estimate that goods destined for the North-West have an average journey distance of just 50 miles by road from the Port of Liverpool, compared to in excess of 200 miles on the congested road or rail networks from Felixstowe, London Gateway or Southampton.

33. We believe that other Northern ports operated by Peel Ports competitors can offer a similar strategy in removing unnecessary long distance road and rail freight movements through improving the utilisation of coastal shipping. Whilst focused investment in road and rail improvements to these Northern ports may be required, it will be significantly less than the investment needed to upgrade capacity on the major strategic road networks, such as the A14, M6, M1, West Coast Main Line and East Coast Main Line, to cater for further unnecessary long distance freight movements.

Are there any regulatory barriers to investment in ports? What could and should be done about them?

34. One of the most significant barriers to developing coastal shipping and utilising ports in the Northern half of the UK is the indirect subsidies offered to rail freight. It was recently concluded by the Office of Rail Regulation (ORR) that although rail freight traffic creates costs of £280 - £400 million each year through factors such as wear and tear on the tracks, freight companies only pay a small proportion of those costs, around 21-28%, with passengers and taxpayers covering the shortfall. In our opinion such an anomaly has the effect of providing the rail freight sector with a hidden subsidy that distorts the market in favour of rail and discriminates against coastal shipping.

35. Over the last two years, Peel Ports has successfully encouraged two shipping lines to operate coastal shipping services into the Port of Liverpool, thereby removing over 500 containers per week from the strategic road and rail network in the UK. Both of these services have commenced without the need for public sector intervention. The full cost of maintaining the port infrastructure, vessels and all variable costs rest with the private sector.

36. One of these new feeder services operates from the Port of Southampton. At present, rail operators are eligible to receive £21 per container per single journey MSRS support for containers moved between Southampton and the North-West on a “call-off” basis. A return journey being eligible for £42 is effectively incentivising the movement of containers over long distances.

37. Whilst coastal shipping is theoretically eligible for Mode Shift Revenue Support (MSRS), the administrative process and bureaucracy that it needs to complete, from which rail is exempt, results in minimal applications. We are not aware of any containerised coastal shipping service operating in the UK that receives MSRS grant support.

38. We believe that the benefits offered through the MSRS scheme and the application process for grant support should be equalised between rail and coastal shipping so that both modes can compete equally for cargo removed from the strategic road network. Moreover, we also believe that by not having to fully contribute to infrastructure cost of the rail network, the market for mode-shift volumes is distorted in favour rail. Peel Ports again strongly believes that support for all transport modes that offer a modal shift away from road should be equalised

21st January 2013

Written evidence from The Port Of Tilbury (PA 11)

1. The Port of Tilbury (the Port or organisation) welcomes the Transport Committee’s decision to inquire into the Government’s policy and provision for access to ports.

Summary

2. The Port is well positioned to access the M25 orbital motorway and the rest of the UK's national motorway network. In addition, there are direct rail connections within the Port with access to the whole of the UK (20% of all the Port’s across the quay goods are moved to and from the Port by rail).

3. In the recent past, the Port has made substantial financial investments to improve and enlarge facilities to cope with projected growth forecasts.

4. The Port wholeheartedly supports the findings of the Department for Transport (DfT) Eddington Transport Study 2006 and ‘Delivering a Sustainable Transport System’ report and believes the analysis still provides the correct basis for prioritising future public investment in transport infrastructure.

Introduction

5. Owned by Forth Ports Ltd, the Port is one of the UK’s largest ports and covers 344 hectares along the River Thames with a diverse mix of operations. The Port and its customers employ 3,500 people and have 34 operational berths.

6. As the members of the Committee know from their recent visit to the Port, Tilbury is the UK’s leading port for handling paper and forest products; home to Britain's largest grain terminal; the third biggest container operation in the country with a thriving cruise terminal facility for Baltic and northern European destinations; and has a strong position in bulk commodities and construction and building materials.

7. The Port is London's major port providing fast, modern distribution services for the benefit of the south east of England.

8. The Port is undergoing a transformation to cement its position with the acquisition of Tilbury Container Services (TCS), January 2012, and the following merger of TCS with Port’s short sea container operation to create London Container Terminal. The new operation builds upon TCS’ significant north‐south reefer trades, primarily South America and South Africa, a number of other deep sea trades, and short sea business with Continental Europe and other UK coastal feeder locations like Grangemouth.

9. Building upon the success of the organisation’s port‐centric philosophy, the Port is also enlarging the port estate. The London Distribution Park (LDP) is a fully consented project that will see the expansion of the Port’s warehousing, logistics and haulage facilities on a 30 hectares site, creating over 1,100 new jobs. A key factor in the selection of the area north of the port estate was the need for close proximity to the Port for support services such as road and rail haulage in order for the supply chain to be as seamless as possible.

10. Even with the recent economic downturn, the Port believes the DfT’s Eddington Transport Study 2006 and the DfT’s ‘Delivering a Sustainable Transport System’, November 2008, analysis still provides the correct basis for prioritising future public investment in transport infrastructure to help further stimulate growth.

What should be the priorities for improved access to ports, and why?

11. The recent economic downturn and weakened demand have had an impact on volumes across most trades. In spite of this short‐term dip in demand, all credible tonnage forecasts show substantial growth in trades (ro ro, container etc) from the present to 2030.

12. With returning consumer demand and port volumes increasing there needs to be long term planning to ensure continuous improvements are made in the national and local transport network.

The Government’s priorities (at all levels) should be to ensure that the UK transport network:

• recognises ports as key gateways for UK trade • provides sufficient capacity in the right places • is properly maintained and efficiently managed • is underpinned by stable planning and financing regimes, and • is based on long term strategies.

13. The development of a Strategic Rail Freight Network, electrification infill of sections of the rail network and all efforts to alleviate road infrastructure pinch points such as the 2012 Autumn Statement M25 Junction 30 announcement are welcome.

14. One project that deserves to be elevated to the top of the agenda is the urgent need to address the lower Thames crossing (Dartford). The congestion in‐and‐around the crossing effects traffic to and from Dover, the Medway ports, existing operations at ports along the Thames and, in the not too distant future, new operations at DP World London Gateway. Logistics firm, Maritime Transport, has estimated that the cost to them from queuing at the Dartford crossing amounts to £8 per truck movement in either direction.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

15. The Port does not believe that the delay in the production of the NPS for road and rail networks is creating problems for improving access.

16. Competing demands and finite funding mean that the industry is always at the hands of the decision making process. The Port, therefore, hopes that decisions on connectivity to the UK’s ports will be guided by the principles listed above.

Are there any regulatory barriers to investment in ports? What could and should be done about them?

17. The designation of Marine Conservation Zones (MCZs) – a process led by Department for Environment, Food and Rural Affairs (DEFRA) – has the potential to dissuade inward investment. Ongoing uncertainty, around the extent of the designation process and what the designations will mean in practice is creating a barrier to trade.

18. The Port welcomes the Government’s decision, December 2012, to further study the impact of the proposed Thames MCZ given the concerns raised by river terminal operators (DP World London Gateway, Tate & Lyle et al) about the impact on economic activity.

19. In 2013, as the framework is progressed for the remaining 100 proposed MCZ sites, the Port hopes that, at the very least, more selective ‘zoning’ of habitats essential to species’ health and viability is sought to avoid any further commercial blight. The ‘potential’ blanket designation of 58 miles of Thames would, as currently described, be disastrous.

January 2013

Written Evidence from Harwich Haven authority (PA 12)

This response is made on behalf of Harwich Haven Authority (HHA), a Trust Port established in 1863 by Act of Parliament and with statutory responsibilities for the protection, regulation, maintenance and improvement of Harwich Harbour. Its primary concerns are the provision, maintenance and development of access to The Haven, safety of navigation and the protection of the environment. HHA’s geographical area of responsibility covers some 150 square miles including the River Stour, lower part of the River Orwell, Harwich Harbour and its approaches up to 12 nautical miles seaward.

HHA is considered by Government to be a Strategic Authority with responsibility for a major UK trade gateway which includes the largest operational container facility in the UK, major facilities for the handling of passenger and freight ro-ro, and the third largest cruise call location in the UK, and with consent secured for additional significant container port development – all of this providing a significant contribution to the local, regional and national economy.

Key points:

1. Ports are not solely reliant on critical road and rail infrastructure. Ports, by their nature of being the interface between land and sea, are as equally reliant on critical navigation channel infrastructure and this essential link should not be overlooked.

2. The Harwich Haven is one of the most important and strategic trade gateways for the UK and development of marine access at The Haven over the years has been a major contributor in building and maintaining that strategic capability. As ship size continues to increase, improvement of navigational access will remain crucial to the UK.

3. Funding of marine infrastructure has historically been borne by the industry through the regime of harbour dues. HHA has in the last two decades invested some £60million on improvements to marine infrastructure and remains alert to the need to constantly look ahead as to when further developments could be required.

4. Planning processes and timeframes are as important to marine infrastructure development as they are to road, rail and to ports themselves. Further emphasis needs to be placed on this critical planning aspect such that ports and their related and essential links are able to respond to the dynamics of the shipping world where it still remains possible to design, order, build and delivery into operation new and larger vessel designs in under three years – far faster than the timeframes experienced to secure and deliver road, rail, port and marine infrastructure.

5. Investment in marine infrastructure, as with both road and rail, provides investor and market confidence. The time (and cost) of getting goods to market influences the route to market. A level playing field is of high importance in a market led sector where inconsistent or inappropriate use of funding, especially public funding, risks distorting the market.

6. Whilst a minor degree of grant funding might, on a case by case basis, be considered to be appropriate, there are real concerns that selective significant public funding of historically privately funded infrastructure would distort the market position leading to the undermining of industry funded investment and a loss of investor confidence.

7. A possible example is where BIS are understood to have made a provisional offer to provide public funding (>85% of project cost) for dredging of the Mersey. The basis for this appears to be in support of the development of a new deep-sea container facility that will be competing with other facilities in the UK including those within the Harwich Haven. This, if allowed to take place, would be a clear case of market interference.

8. Accordingly, any policy of major intervention with public funding of marine access to ports, especially when it is replacing historically industry funding, needs to ensure a level playing field. This can only be done by providing the same proportion of funding to all such marine infrastructure developments.

January 2013

Written evidence from Royal Town Planning Institute (PA 13)

Introduction

The Royal Town Planning Institute (RTPI) is pleased to respond to the call for written evidence to the Transport Select Committee on Access to Ports. The RTPI is the largest professional institute for planners in Europe, representing some 23,000 spatial planners. The Institute seeks to advance the science and art of spatial planning for the benefit of the public. As well as promoting spatial planning, the RTPI develops and shapes policy affecting the built environment, works to raise professional standards and supports members through continuous education, training and development.

Summary

The RTPI considers that access to ports should be planned as part of transport investment more widely and not as a single issue.

Detailed Questions

What should be the priorities for improved access to ports, and why?

1.1 One priority is the need to support the offshore industry.. The government has committed itself to investing £60m in developing offshore wind manufacturing facilities at UK ports and this commitment needs to be aligned across transport access. 1.2 Another priority is to undertaken ports access investments that serve other purposes as well. Other purposes would include providing additional capacity for general rail passenger and freight, providing good transport access to unlock housing land, or to provide surface access to airports. Investment that can achieve a variety of purposes will bring better returns. There is a crying need for investment in transport infrastructure to unlock housing land, and it is currently difficult to see how that can be financed from housing alone. 1.3 Since port competition is not necessarily between UK ports between also with ports on the Continent, investment in access to ports should take supporting UK ports in this competition into account. 1.4 A further priority for ports investment might be to relieve heavily inhabited areas of through freight traffic on rail or road.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

2.1 There is an exceedingly urgent need for National Policy Statement on railways and roads. It is now over four years since the Planning Act 2008 and there

seems to be no sign of an NPS. But even with such an NPS the issue of planning all modes of transport in an integrated manner, and in a way which ensures strong connections with housing, and reaps the cross-sector benefits, would still not necessarily be addressed. 2.2 Network Rail at least has published very clear plans on investment which has implications for Ports such as the electrification of the Sheffield-Southampton route. The difficulty here is the relative lack of accountability of these plans, which are produced by (effectively) a private company (albeit with public ownership). An NPS on the other hand would be debated in Parliament and subject to proper appraisal of economic, social and environmental impacts. 2.3 The RTPI is pressing for a Map for England which would enable all government policies relating to the land of England, including major road and rail access to ports, to be clearly set out in map form so that they can be compared with other polices such as housing and environment. See www.mapforengland.co.uk

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

3.1 There are complications. CLG and BIS are promoting local enterprise partnerships as key players in strategic planning for growth in subregions. However, for understandable reasons, DfT delegation of spending decisions is to Local Transport Boards. This is a complication which risks different bodies pulling in different directions. 3.2 The Localism Act removed Regional Transport Strategies from the landscape. Within the planning sector there is some statutory encouragement to local planning authorities to “cooperate” on strategic planning issues. The new arrangements for the National Health Service require cooperation across principal authority areas (same areas as highways authorities). There is a risk that the very complex geometry of strategic planning for different purposes will be suboptimal.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

4.1 No comment other than we would agree that road and rail infrastructure will have a strong influence on port investment decisions.

Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

5.1 There are significant issues around assembly units/plants developing in and around ports and blurring the distinction between warehousing and manufacturing. There already have been examples of port developments that have not taken account of land side access, such as Eastport, Great Yarmouth with poor links to Trunk Road network and virtually no access to the rail network. If we are to enhance the economic potential of our port network then such issues will have to be rectified in the building of new ports.

6.1 No comment : we are not qualified to assess these assumptions.

Are there any regulatory barriers to investment in ports? What could and should be done about them?

7.1 There are Issues around other consent regimes eg Harbour Revision orders. This issue has acted as a significant barrier to expansion of Teesport (Northern Gateway Container Terminal)

January 2013 Written evidence from The Commercial Boat Operators (PA 14)

Who we are and what we do

1. The Commercial Boat Operators Association (CBOA) is a trade association representing firms which carry cargo and provide engineering services on Britain’s inland waterways. We have approximately 100 members, including associates.

2. Department for Transport statistics showed that 43.2 million metric tonnes were carried on the waterways in 2010 including the inland part of major estuaries. This is part of the 106 million metric tonnes on UK domestic waters – 5% of the UK total, equal to that carried by rail.

3. In terms of distances moved, 19% of UK freight is moved by water, compared with 9% by rail. Cargoes carried include aggregates, fuel oil, grain, rice, steel industry materials and products, residual domestic waste, abnormal indivisible loads (such as large electricity generators) and bagged domestic coal.

4. Many operators’ craft can carry 500 tonnes or more – taking the equivalent of 18 or more 29 tonne capacity lorries off the road.

5. Water transport can play an important role in reducing lorry traffic and thus road congestion and accidents. It is far more environmentally friendly and emits 75% less CO2 per tonne kilometre than road haulage. It is also a better user of energy resources than rail or road (Tyndall Centre for Climate Change).

The current situation

6. In the last 5 years the CBOA has welcomed many Government initiatives and reports relating to the ports industry. The most significant of which has been the publication in October 2011 of the National Policy Statement on Ports. This was primarily due to the recognition given and emphasis placed within the Policy Statement to the role the commercial waterways network can play in assisting the development of the UK’s ports industry.

7. The UK's commercial inland waterways link many of England’s centres of population (Leeds, York, Sheffield, Nottingham, Worcester, Manchester and London) to coastal ports and provide a greatly underused conduit for freight transport.

8. Unfortunately we have not seen a significant rise in the tonnages carried via inland waterways to coastal ports. Although we believe that the potential remains and the inland waterways should have an increasing role to play in ensuring that the UK port sector continues to contribute greatly to our national economy.

9. This is due to a general lack of a collective approach from the plethora of stakeholders who are required to act to achieve the stated aim of facilitating modal shift onto the commercial waterways.

10. The freight carrying potential of the inland waterway network is compromised by a lack of ownership at all levels of government.

11. While the Department for Transport is responsible for freight policy, it is the Department for Environment, Food and Rural Affairs who are ultimately responsible for the Canal and River Trust and the Department for Communities & Local Government who are responsible for the planning process.

12. Due to the length of our commercial waterways no one Local Authority is responsible for facilitating freight carriage on any particular waterway and in fact we find that along the length of a waterway the local authorities sometimes have very different, often conflicting policies relating to inland waterways.

13. With the establishment of the Canal and River Trust (CRT) the Government has freed up the navigation authority from public control and put it firmly in the hands of the Trust’s “members”. While the CBOA has welcomed this initiative it is still fearful that again facilitation of inland waterway freight carriage will drift to the periphery in this new organisation.

What needs to be done

14. The “call for evidence “posed a number of questions the first of which is “What should be the priorities for improved access to ports, and why?”

15. The CBOA believe that the Government should consider how it might encourage port authorities that are connected to commercial waterways to take responsibility for promoting and an active role in encouraging the greater utilisation of the linked commercial waterways for onward carriage of goods landed in their port and vice-versa.

16. We would hope that an increase in goods carried to and from a port via the waterway network would reduce traffic congestion in and around the port, which we are sure would be welcomed by shippers and local residents alike.

17. The third question asks “How satisfactory are the current and proposed decision-making structures, including Local Transport Boards”

18. Unfortunately as inferred above due to the fact that commercial waterways flow through many local authority areas we do not believe that the current or proposed decision making structures are best –placed to assist in realising the freight carrying potential of our commercial waterways.

19. There is no doubt that Local Enterprise Partnerships (LEP’s) have a role to play in facilitating the greater use of the commercial waterway for the carriage of freight in their area but we have a fear that without unequivocal guidance from central government and the establishment of national oversight all we will end up with is a greater fragmented landscape than we presently have.

20. We have to ask, who is going to ensure that all stakeholders (Government Departments, Local Authorities, LEP’s & CRT) act together to encourage the development of inland waterway freight along the length of any commercial waterway?

21. The fourth question asks “To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?”

22. We would wish to highlight that consideration should be given to the cost benefits of any future investment in infrastructure. We believe it is proven that while the freight carrying potential of the commercial waterways is not yet reached that potential can be increased further should there be targeted investment in inland waterway infrastructure.

23. The widening of a lock on the River Trent or the raising of a bridge on the Aire & Calder may not require significant investment; it may however increase the size of vessel capable of navigating the length of a commercial waterway. Thus increasing the potential tonnages transferred from road.

24. The final question asked is “How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight?”

25. The CBOA believes that current assumptions regarding modal shift should be reappraised. There is a desperate need for considered approach to be taken and a truly independent freight survey carried out which identifies what the potential is and what if any barriers exist to realising that potential.

26. Inland waterway freight has long been the forgotten mode and unless this specific package of work is undertaken and the potential quantified and communicated the assumption that it is a transport mode of yesteryear will persist.

27. We have seen on the continent how inland waterway freight plays a significant role within the ports industry why not here.

28. As well as the aforementioned policy driven steps there are some practical steps we would advocate should be considered. The first being that many of the commercial waterways are tidal and (especially in the case of Immingham) carry restrictions on craft in terms of construction, equipment and manning. We would ask that these restrictions be reviewed and eased if this can be done without compromising safety.

29. Furthermore there are ports that charge inland waterway craft owners for access to dock waters yet do not charge road vehicles for use of the internal road system this we believe should also be reviewed as it is clear that it has created an uneven playing field between modes.

30. To conclude, while the Port Authorities themselves must take some responsibility, the Government whether that be central or local must also be at the forefront to ensure that inland waterway freight carriage plays its part in a truly integrated and sustainable freight carrying transport system.

January 2013

Written evidence from British Ports Association (PA 15)

Introduction

We welcome this inquiry which covers a subject which is critical to the success of the ports industry. The British Ports Association (BPA) represents 48 ports in England, all of which will depend on the adequacy of their links to the UK’s transport network.

1. What should be the priorities for improved access to ports and why? i) The priorities should be to ensure that the UK transport network:-

• recognizes ports as key gateways for UK trade; • provides sufficient capacity in the right places; • is properly maintained and efficiently managed; • is underpinned by stable planning and financing regimes; • is based on long term strategies. ii) These priorities are hardly likely to be exclusive to ports and will no doubt be shared by all who have a stake in the commercial health of the UK and its competitiveness and productivity. The UK’s infrastructure is vital as an enabler of economic activity of which the ports sector represents a very significant part. An Oxford Economics report published in December 2012 showed that in 2011 UK ports contributed £7.9bn to UK GDP and supported 391,800 jobs. They handle 95% of import and export trade by volume. Their connectivity will therefore have an influence far beyond the port gates. iii) There are features of the port sector which have a bearing on their hinterland connections and also distinguish them from ports in other EU member states. The sector is independent of government financial and strategic involvement and there are no national arrangements whereby port connectivity is regularly assessed in a formal, transparent way. This could possibly be addressed with a National Road and Rail Policy statement, and we return to this in our response to Q2. A consequence is that the quality of port connectivity varies greatly from port to port and much will depend on, for example, the success of local lobbying and the decisions of the Highways Agency and local authorities. iv) Other influencing factors are the UK’s geography and industry structure. The number of active UK ports (c.120) is amongst the largest of any EU member state. UK ports are generally smaller than their EU counterparts with a high total volume stretched along an extensive coastline. In contrast, the Netherlands, for example, has a relatively short coastline with heavily concentrated port traffic; the Port of Rotterdam itself handles more traffic than all the Spanish ports put together. So, although strategic road and rail decisions may not necessarily be easy in the Netherlands and other member states with significant port activity, they are nevertheless likely to be easier than in the UK where there are many more competing demands for limited resources from a greater range of ports with more diffused activity. v) Economic conditions since 2007 and the weakening of demand have obviously had an impact on port volumes. These rose to a peak of almost 600m tonnes in 2005 but are now at a level of just over 500m tonnes. Nevertheless, tonnage forecasts, which are part of the 2012 National Policy Statement for Ports and which show a doubling of ro ro

traffic and an increase of 182 % in container traffic between 2005 and 2030, are still sound indicators of growth and endorsed by the DfT and the industry. Demand will return and port volumes will increase. So in the case of long term planning, there remains an overwhelming case for improving the network vi) It is also worth reiterating some of the conclusions of the Eddington Report which, although published in 2006 is, we believe, still very relevant. It was the last all- encompassing document produced by government to try and capture the UK’s infrastructure requirements and their link with economic growth. Two of its main conclusions were firstly, that investment in links to ports represents exceptionally good value for public money. Strong cost benefit ratios for investment in access to ports were assessed as between 3 and 15, which translate into equivalent GDP benefits. Secondly, that the basic transport network for the UK is largely complete and the concentration should be on optimizing and improving that network rather than necessarily investing in larger, more prestigious transport schemes. We agree with this latter point and the basic need to maintain and improve the existing network and the importance of local connectivity to it. Devolving decision making to Local Transport Bodies could be a helpful step in this direction. vii) In preparation for this response we carried out a short survey of some BPA members. Conditions from port to port vary enormously with different issues and problems, but a recurring theme was the lack of good local connectivity to the main network and “long delays in the final two miles to the port”. Problems ranged from lack of dualling of local roads to concern about the effects of extreme weather. Handling significant volumes of HGV traffic within routes that are also used intensively for local short journeys is a challenge to all planning authorities and requires clear strategies and funding. Asked to quantify the adequacy of road connections on a scale of 1-10, answers ranged from 3-5 with a single 7. There is a general lack of confidence that even if a scheme is identified and accepted, the funding will simply not be there – “a distinct lack of money in the local system”. This creates extra pressure on developers to enter into Section 106 Agreements. Port connectivity therefore is as much an issue of local planning, recognizing the importance of the port and its links to the national network. viii) Two further factors are worth mentioning at this point. One is that improving transport efficiency is not always a matter of the physical network. Better signage, real time information on traffic flows and other traffic management initiatives can make significant differences, especially on mature routes. The other point is that in both the UK and the EU, there is a preference for high cost rail passenger schemes rather than investing in road. Road may suffer from its environmental reputation, but it is still the main means of getting into and out of ports, and any decline in the quality of road connections would seriously restrict port growth and efficiency.

2. Is the delay in producing a National Policy Statement for national road and rail networks creating problems in access to ports? If so, in what ways and where? i) We do not believe that the delay in the production of the NPS for road and rail networks per se is creating problems for improving access, but we do believe that what could be a problem is delay in reaching decisions on transport funding. It is difficult to have much meaningful discussion about transport without coming back to budgets and it is here that the government will have to take some difficult and far reaching decisions if

the road and rail networks, and consequently the connectivity of UK ports, are to be sustained and improved. ii) We understand, for example, that the Treasury and the DfT are now looking more seriously at the prospect of road tolls and that this will be subject to consultation in 2013 as part of a wider DfT and Treasury review of financing transport. iii) Based on what we know now, the outlook for the UK’s transport network is extremely concerning. A National Audit Office report in October 2012 noted that although the DfT’s funding, which provides around 60% of capital funding to local authorities for transport, has remained stable, there is a 28% fall in grants from the DCLG. The Audit Commission reported in 2011 that there is “a significant but unquantifiable backlog of maintenance work needed to get local highways to a sustainable level”. Since then we have had extreme weather events which can only have exacerbated the problem. This means that funding for routine local highways maintenance is likely to be reduced. Tolling may be part of the eventual approach, and we make no comment on the benefits or otherwise of tolling, but whatever is decided, it needs to be in place reasonably quickly. iv) In addition, there needs to be more long term certainly about budgets. The 2010 spending review set a transport budget that was 15% lower in 2014-15 compared to 2010-11. As part of this the Highways Agency budget was cut by £1bn for the 2014-15 period. Nevertheless, we understand that this shortfall has been largely re-instated as a result of subsequent Treasury decisions. Although such a re-instatement is welcome, it can hardly make forward planning within the Department or the Agency any easier; the structure and status of the Agency itself are also under review. Stability in budgeting would be very welcome; we suspect that it will be the Treasury which will have more influence on the transport network than any National Policy Statement (NPS). v) Currently, about 66% of all goods are transported to and from ports by road. All the indications are that road usage will increase. This is partly a function of population growth and also a result of (eventually) increasing demand in the economy to pre- recession levels and beyond. In comparison with other member states, in terms of adequacy and reliability, our road network is probably mid-table. A World Economic Forum report published in 2012 put the UK at 24th and 16th place respectively for road and rail quality. In comparison, France’s relative positions are 1 and 4, Germany’s 10 and 7 and Spain’s 13 and 18. This situation is partly the result of not only a lack of investment but also the UK’s planning system which can mean that road and rail developments are controversial and subject to local opposition. This is in comparison with some other member states which apply national infrastructure plans in a more robust way. vi) However, one function of a NPS for road and rail could be to consider in a more formal way how the adequacy of links to ports as gateways to trade and generators of traffic can be factored into policy and funding decisions.

3. How satisfactory are the current and proposed decision making structure, including local transport boards?

i) There are two main issues with the decision making structures. Firstly, they are subject to constant change. For example, RDAs set up strong links with ports, produced their own transport strategies and in some areas we were able to set up regular liaison between groups of ports and RDA transport representatives. RDAs have now been wound up and in their place LEPs and Local Transport Bodies (LTBs) created. Each system has its strengths but considerable time is taken up with these changes. ii) The second issue is that it is simply too early to judge whether LTBs are going to be effective. There is a very ambitious timetable for their setting up which is contained in a document published by the DfT in September 2012. This has a deadline of December 2012 for LTBs to set out proposals for their governance and financial management; LTBs have until April 2013 to publish an initial list of priority schemes for funding from 2015 onwards and, according to para 8.6 of the document (Devolving Local Major Transport Schemes: Next Steps), if LTBs fail to meet the timetable there are no guarantees that funding will be available.

4. To what extent can investment in road and rail infrastructure influence the market and regional decision making on port development? i) Hinterland connections are vital to any port’s success, so the level of investment in road and rail infrastructure and the adequacy of that infrastructure will influence port choice. Although generally the UK has a good major highways network, some of the potential of medium and smaller ports is compromised by lack of access to that network. We would certainly not support any policy aimed at deliberately distorting the ports market through heavy investment in a particular region by the government. But we do support higher investment in a range of more local repair, maintenance and improvement schemes for both road and rail which enhance port connectivity and allow the UK’s collective port assets to be used in a more optimal way. ii) Another relevant issue is the Office of the Rail Regulator’s (ORR) review of track access charges. The review of the charges, which are used by Network Rail for the maintenance of the rail network and cover wear and tear from freight use, has thrown up some unwelcome possibilities. Under the ORR’s proposals certain cargoes, such as power station use coal, are facing steep increases in costs which could disadvantage ports at a greater distance from power stations. These increases might impact sensitive port markets and freight routes, and disadvantage some ports. We are also concerned that the government’s assessment of the impacts has not been thought through properly, with limited attention to potential distortions. We are studying the ORR response with interest.

5. Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

We believe they are. There is a section on measuring traffic impacts in the planning guidance set out in the National Ports Policy Statement and, for example, the system of “developer contributions” referred to in 7 (ii) below is one consequence of this. It is not so much decisions on port development taking account of traffic generation, it is dealing with existing traffic generated by existing facilities.

i) Rail’s modal share of port traffic has shown remarkable consistency at about one-third of the total; the vast majority of this traffic will be containers and bulk goods, so rail’s modal share will be heavily dependent on the volumes of these categories of cargo rather than the totality of cargo passing through UK ports. The volume of ro-ro traffic is still greater than container traffic and ro-ro traffic is of course not susceptible to rail connections. So we are not aware of any factors at play to indicate any significant change in rail’s modal share. As the Transport Committee itself pointed out in its recent report, rail freight can be marginalized and receive considerably less priority than passengers on a crowded network. We do not have high expectations that rail can provide significant new capacity for ports and freight. We expect the dominance of road to continue. ii) On short sea shipping there have been many initiatives over the years. We are members and supporters of the “Freight by Water” organization which promotes the sector and is co-ordinated by the Freight Transport Association. Improved port connectivity should assist in encouraging coastal shipping. Of course ports would welcome increased coastal shipping and increased trade, but it has to make commercial sense to the port concerned. The port “offer” is readily available to the freight industry, and the freight market will decide, but to actually achieve a significant modal shift will probably require an additional incentive of some kind to convert from road and rail to ship and we do not see any prospect of this happening.

7. Are there any regulatory barriers to investment in ports? What could and should be done about them? i) We are not aware of any particular regulatory barrier to investment in ports, although there can be barriers to development resulting from the planning regime and environmental constraints. We have been working closely with Defra on the influence of the Habitats Regulations on planning consents and have made good progress with a revision of guidance which should facilitate a more development friendly planning regime. Section 106 agreements and conditions under the Town and Country Planning Act 1990 are also sometimes cited by ports as providing real and unwelcome barriers to port development and investment. ii) A potential barrier for investors in UK ports is the policies expressed in the DfT’s “Funding Transport Infrastructure for Strategically Significant Developments”. This outlines a system whereby a port development which requires a new road or rail connection from which the development will receive benefits means that the port is required to make a contribution to the cost of that connection separate to any Section 106 Agreement. From a public policy point of view this may seem fair, but it is a situation unique, so far as we know, to the UK. In other member states the connection would be a matter for public funding. iii) It is also significant that in the review of the TEN-T legislation and policy by the EU Commission, one of the underlying assumptions is that funding would only be available for rail connections, not road connections. We see this as an example of a prejudice against road building (already referred to under Q1) which emerges from time to time as it is too often regarded as an environmentally unfriendly mode and investment in it would be at the expense of other modes. We believe that this prejudice is entirely misconceived and that improving the road network reduces congestion and pollution.

iv) January 2013

Written evidence from TFL (PA 16)

1 Introduction and summary

1.1 Transport for London (TfL) welcomes the opportunity to contribute to the Committee’s inquiry into Access to Ports.

1.2 TfL does not have views on all the questions raised by the Committee, however best use of the rail network in London, climate change and air quality, are of vital interest to TfL. Many of the goods carried by rail from ports pass through London’s rail network, and London is the end market for many of the goods brought into the country, so TfL has a direct interest in ports and consequent mode share issues.

1.3 To summarise the response given below, TfL’s priorities in relation to ports are for: • Electrification of the Gospel Oak to Barking line and the Thames Haven branch • Completion of the Felixstowe to Nuneaton (cross country rail route) project, to the maximum possible capability • Electrification of other sections of diesel line in London • A London freight by-pass scheme in the longer term • A solution to the High Speed 2 to High Speed 1 link that does not have a detrimental impact on North London Line passenger and freight services • The development of intermodal (container) rail freight facilities in or around London, to handle port-related traffic and increase rail’s mode share • The development of freight terminals in the London Riverside area serving High Speed 1.

1.4 Our response to selected questions in the terms of reference for this inquiry is as follows.

2 What should be the priorities for improved access to ports, and why?

2.1 The priority for access to ports from TfL’s perspective is for sufficient rail capacity such that rail’s mode share of the goods carried can be maximised, whilst catering for the ever-increasing passenger demand in the London area.

2.2 Mayoral policy on rail freight, as set out in the Mayor’s Transport Strategy, supports mode shift from road to rail, and the development of rail freight terminals serving London and the South East. It also calls for electrification of the remaining diesel lines in London.

2.3 However there is also a need for increased passenger services, and with the rail network in London operating at or near its maximum capacity, there are constraints on the ability to run additional services. This situation is being managed at present, but will present a serious constraint on future growth in passenger and freight services in the longer term if not addressed.

2.4 The background to this is London’s dependence on its rail network, the growth forecasts for the capital set out in the Mayor’s London Plan, and the contribution London makes to the UK economy. It is important to remember the sheer scale of existing public transport use in London with more than 11m journeys made on an average day. Almost half of all bus journeys in England take place in the city and 60 per cent of all rail journeys in Great Britain start or finish in London. On top of this, the London Plan forecasts population growth of 1.25m people from 2007 to 2031 and 750,000 jobs over the same period. Meanwhile, London and the South East together contribute in the order of £20bn a year to the rest of the country via a tax export, and provide more than 40 per cent of all tax revenues in the UK.

2.5 The London Overground network plays its part in contributing to national GDP. Demand has more than doubled on the ‘original’ network that TfL took over from Silverlink in 2007, and has quadrupled if the extensions to the East London Line are included. By 2021 it is forecast to carry 165 million passengers a year. TfL is currently seeking to lengthen trains to 5-cars, to cope with demand up to the mid-2020s, but thereafter adding further capacity becomes considerably more difficult.

2.6 The enhancements TfL has made to the London Overground since taking over from Silverlink have unlocked huge levels of previously suppressed demand for orbital travel, such that the Overground is now the 4th busiest National Rail franchise in the country, with only South West Trains, Southern and South Eastern carrying more passengers. It carries four times the number of rail passengers in Wales; 1½ times the number in Scotland; and 30m passengers a year more than Northern.

2.7 The London Overground rail network is shared with other services, most notably freight where it provides essential routes from ports in the south east to the rest of the country, but also other passenger services too. The main East London Line corridor is shared with Southern services up to New Cross Gate, the North London Line and Gospel Oak to Barking Line are shared with freight services, and the West London line corridor is shared with both Southern services and freight. These corridors are already operating at, or very close to the maximum existing line capacity, dictated primarily by the signalling system (and the need to route trains over flat junctions).

2.8 Sharing services with freight is a particular constraint on line capacity. The combination of different length passenger and freight trains, different speeds and service characteristics, flat junctions and the longer signal section in Hampstead Heath tunnel, limits the current North London Line capacity to an effective 12 trains per hour (eight Overground trains per hour and four freight paths per hour) west of Gospel Oak. Similarly, the Gospel Oak to Barking Line is constrained to eight trains per hour – four passenger and four freight. The West London Line, which is the most crowded part of the Overground network, could potentially accommodate 10 passenger trains per hour (a mixture of Overground and Southern services), but is constrained beyond that by the 35 freight paths per day protected by international agreement for Channel Tunnel traffic.

2.9 By contrast, the Victoria line, with dedicated passenger services, a single rolling stock type and no branches, operates at 30 trains per hour in the peaks (soon to become 33 trains in the peak hour) and 24 trains per hour off-peak.

2.10 Freight trains suffer from the inefficiencies of slow speeds and stop- start journeys, when stuck behind slower-moving metro-style passenger services. There are also constraints on the maximum length and speed (i.e. braking distance) of freight trains, as these drive the distance between trains, which in turn determines the overall line capacity. An optimal passenger service requires high frequencies and consequently has closely-spaced trains, whereas an optimal freight service requires high speeds with long braking distances and consequently has trains further apart. In short, the mixture of passenger and freight services on London’s rail network results in compromises which suit neither type of operation.

2.11 Meanwhile, the freight services which use the rail network in London currently have little choice but to do so, given their commercial imperatives. From the Haven ports (Felixstowe, Ipswich and Harwich), there is not as yet a commercially viable route of sufficient capacity to the markets in the north without using the North London Line and/or the Gospel Oak to Barking Line to access the West Coast Main Line, the East Coast Main Line and the Midland Main Line.

2.12 Market competition with highways requires freight services to take the quickest route, so any alternatives to routings via London must be of equal (or better) journey time, as well as having sufficient capacity. In the case of the Haven ports, a part scheme is underway in the current Control Period (2009 to 2014) to upgrade the cross-country route for traffic from Felixstowe to the north. Known as the Felixstowe to Nuneaton project, further works will be required in the next Control Period (2014 to 2019) to complete this scheme. TfL wholly supports this scheme, and considers its completion, to the maximum possible capability, to be essential.

2.13 However, rail freight traffic from the Thames ports (Tilbury and the major London Gateway port currently under development) has no choice but to route via the Overground network. Unlike the Haven ports, there is no existing cross-country route that can be upgraded. Furthermore, growth from London Gateway port is such that it is forecast to consume all capacity released in London by the Felixstowe to Nuneaton project.

2.14 In the longer term this presents a significant problem for London. Mayoral policy would like to see as much of the Thames Gateway traffic as possible carried by rail but this will be limited by the capacity of the North London Line, and similarly the ability to further enhance London Overground capacity will be limited by freight services.

2.15 It is also worth noting that London is not the immediate destination for rail freight traffic from the Haven and Thames ports. It is not economically worthwhile to load and unload trains for the very short journey from London Gateway, say, when carrying goods by road is cheaper. So much of the rail freight traffic on London’s rail network is simply passing through, but doing so on some of the most heavily used rail infrastructure in the country.

2.16 The ultimate solution for through-freight traffic in London, and Thames Gateway traffic in particular, is some form of freight by-pass. There are no specific plans for this at present, but it is likely that it will become necessary in the longer term if demand continues to grow as predicted, and any strategic planning work undertaken now should take this into account.

2.17 A further priority for improved access to ports is electrification of the rail freight network. Electric traction is more efficient; longer trains can be hauled, at greater speeds, and with faster acceleration. It is also more environmentally sustainable, less polluting, and contributes towards the goals for carbon emission reductions and air quality set in the Mayor’s Transport Strategy. Given the high value of AM peak train paths, and the high loadings on North London Line passenger services, it is essential to get the most out of the existing network; electrification, with its greater efficiency, is one way of helping to achieve this, and demand management could be another, for example with the AM peak given over to passenger services.

2.18 The government in its High Level Output Specification is promoting the concept of the Electric Spine, from the south coast to south Yorkshire, and other electrification schemes. TfL naturally welcomes this, but take-up of electric traction by Freight Operating Companies requires a critical-mass of end-to-end electrified routes before it is worth their while investing in electric locomotives. The Gospel Oak to Barking line remains a critical ‘hole’ in the electrified network, and this short stretch of non-electrified line prevents freight services from making use of the fully electrified East and West Coast Main Lines to Scotland, for example. Filling in this short section, along with the Thames Haven branch, would enable services from Thames Gateway port to be electrically hauled. Electrification of this line would also benefit TfL’s passenger services, and TfL has offered to contribute the value of the rolled-up cost savings from its passenger service arising from electrification, worth £25m.

2.19 There are other small sections of non-electrified line in London, such as Kew East, Dudding Hill and related chords that would also support or enable long distance services to be electrically hauled, in conjunction with the schemes announced by government.

2.20 The final point relates to the proposed link between High Speed 2 and High Speed 1. High Speed 2 Ltd’s current proposals would make use of existing track in the Camden Viaduct and Camden Road station area. As the paragraphs above highlight, this section of railway is crucial to both passenger and freight services, and with growth of Thames Gateway traffic may reach the point that a freight by-pass becomes necessary. Operational analysis undertaken by Network Rail indicates that the current HS2 proposals would create serious conflicts with passenger and freight operations (including traffic from the ports to the east, if high speed trains are introduced into this already congested area. TfL is firmly of the view that any link between the high speed lines should be on separate infrastructure, entirely additional to the current layout, or an equivalent solution that has zero impact on passenger and freight operations. As this is likely to be expensive, the opportunity should be taken to consider freight in London more widely, and whether a by-pass scheme might represent a better long term solution.

2.21 To summarise, TfL considers the priorities for access to ports to be: • Completion of the Felixstowe to Nuneaton project, to the maximum possible capability • Electrification of the Gospel Oak to Barking line and the Thames Haven branch • Electrification of other sections of diesel line in London • A London freight by-pass scheme in the longer term • A solution to the High Speed 2 to High Speed 1 link that does not have a detrimental impact on North London Line passenger and freight services

3 How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight?

3.1 TfL’s priorities for access to ports are described above, which would enable rail to claim a greater modal share of ports traffic. A further enabler in reducing port-related road traffic would be the provision of rail freight terminals.

3.2 Many goods brought by container ship into Felixstowe, for example, are taken by rail to Daventry International Rail Freight Terminal, a major distribution centre in the midlands. Some of these are then taken by road to local distribution centres or stores in London. Intermodal (i.e. container) rail freight terminals in or around London would enable this and other intermodal traffic, either domestic or from other ports, to be carried by rail to the capital.

3.3 With the UK rail freight industry being entirely privatised, development of rail freight terminals is a matter for the private sector. However as they are generally large and often controversial, their development boils down in practice to planning permission. Government policy is supportive of the development of strategic rail freight interchanges (SRFIs), with a Written Ministerial Statement published on 29 November 2011 along with a policy guidance document. The government asked Network Rail to:

‘provide industry support to the development of a network of SRFIs, working collaboratively with the wider logistics industry to: speed up the delivery of SRFI sites to meet business demand; assist with funding mechanisms (potentially including Network Rail funding); and establish appropriate delivery vehicles for rail infrastructure elements of such proposals.’

3.4 TfL very much supports these measures and would be keen to see some developments taking place on the ground. TfL supported the earlier Strategic Rail Authority proposal for a ring of terminals in and around London, and provided evidence to the Howbury Park inquiry. (Howbury Park is a planned Strategic Rail Freight Interchange near Dartford, which has planning permission). TfL is supportive in principle of proposals for rail freight terminals at Radlett on the Midland Main Line, and Colnbrook near Heathrow. TfL believes that such facilities would reduce port-related road traffic.

3.5 A related point concerns the use of High Speed 1 for freight, which remains an under-used facility. It is Mayoral policy, set out in the Mayor’s Transport Strategy to support the use of High Speed 1 for freight, and the development of associated rail freight terminals in the Barking and Dagenham (London Riverside) area. This could provide an attractive alternative to lorries from the continent using the Port of Dover and the motorways in Kent.

January 2013

Written evidence from DB Schenker (PA 17)

1. DB Schenker is pleased to submit evidence to the Transport Committee’s Inquiry into Access to Ports.

2. DB Schenker is the largest UK rail freight operator. DB Schenker moves around 70 million tonnes / 10bn tonne kilometres of freight a year and employs over 3000 staff in Great Britain. Besides transporting coal for electricity generation, steel and petroleum, we move stone, deep-sea containers and operate international freight services through the Channel Tunnel in connection with the European Network of DB Schenker. DB Schenker is wholly owned by Deutsche Bahn AG, the second largest logistics provider in the world..

3. Rail freight and ports are inextricably linked, with over two thirds of all UK rail freight having some relationship to ports (and for the purpose of this evidence, we will treat the Channel Tunnel as a port of entry to the UK). This includes: a. Intermodal traffic to and from the major deep sea ports, b. Intermodal and general cargo via the Channel Tunnel c. Bulk products such as coal, steel and grain imported to, and exported from, the UK. This includes raw materials as well as finished products. d. Marine dredged aggregates being landed at wharfs, and coastal shipping of aggregates from remote superquarries e. Petroleum products being brought ashore by pipeline for refining and subsequent movement by other and also the more traditional bulk traffics, operating from a wide range of ports to inland destinations across the country.

4. Historically ports have had extensive rail infrastructure, although in many cases this has become run down or disused except for specific cargoes or sections of ports. However In recent years there has been some reversal of this trend with significant investment in: a. port rail infrastructure and equipment, for example at ABP Immingham b. the UK rail network in relationship to ports with the Government’s investment in a Strategic Railfreight Network. The continued further investment from Government in last summer’s High Level Output Specification is also welcome.

5. However, as the development of the Strategic Freight Network shows, there remains a major task to ensure that appropriate rail infrastructure (in terms of capacity, capability in terms of gauge clearance and diversionary routes) is in place to and from ports and as efficient as necessary to deliver for UK economic needs.

What should be the priorities for improved access to ports, and why?

6. Further development of the capacity and capability of rail routes from ports – and the links with the major UK rail network – to provide network capability;

Continued development of the Strategic Freight Network with a particular focus on;

a. Main rail routes to ports to improve loading gauge and enhance capacity. b. Diversionary rail routes to facilitate 24/7 access between ports and destinations. c. Protection of rail freight capacity, especially to cater for future growth. This should also include capacity freed up by the development of HS2, which could be used by freight

7. Further investment in rail connected facilities on ports, to provide appropriate connectivity;

a. Warehouses. b. Terminals and loading/unloading facilities. c. Yards and wagon storage sidings. d. Roads and other connecting infrastructure to assist modal transfer.

8. Electrification of rail freight facilities in the longer term, to allow electric haulage of freight trains to realise environmental and capacity benefits;

a. Main and diversionary network routes. b. Yards and lines within port complexes where practicable. c. Shunting capability to move wagons from electrified exchange sidings to and from loading/unloading facilities.

9. Developing the supply chain for the movement of biomass;

With the Energy Bill set to become statute later this year, many electricity generators are looking to biomass as a way of substituting for coal fired generation. Drax and Eggborough are among sites looking to convert some, or all, of their units, once the precise details of the Renewable Obligations Certificates (ROCs) tariffs are confirmed. Biomass will need to move by rail from the ports to the power stations, and there are some challenges to be overcome to establish this.

10. Biomass can be moved in existing rail wagons but they need to be converted to ensure that the product stays dry. There is also a need to invest in loading and handling facilities at the ports and power stations. Although the majority of this could be funded in the private sector, this must be supported by a stable framework from Government, both in confirming the ROCs and also in setting freight access charges. ORR are proposing to consult on charges for biomass shortly, following their recent conclusions on freight specific access charges. It is important that rail access charges do not act against developing this market, either by their actual level, or by the risk of future increases which could act against the case for investment.

11. Biomass trains will also need to be managed carefully on the network, as, unlike coal, it is not suitable for stockpiling and services will be more akin to “just in time” deliveries. Biomass is less dense than coal; as a result trains may need to be longer and more trains may be needed and further investment in the rail network may become necessary.

12. Channel Tunnel.

The reasons for the chequered history of rail freight volumes through the Channel Tunnel are well known, but the level of tolls and other Channel Tunnel charges remain a major impediment to the development of Channel Tunnel volumes.

13. Establishing the necessary inland terminals to handle intermodal and retail sector commodities.

Rail freight cannot grow and drive modal shift from road unless there are sufficient and suitable inland terminals for onward distribution of goods. Private sector funding is readily available to develop these, but such developments are complex and require support in the planning system.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

14. The National Policy Statement for National Networks (NPS), which is required under the Planning Act 2008 underpins the planning regime for nationally important infrastructure. Specifically, and most importantly it should provide the national justification and need for infrastructure, leaving developers to justify only why their specific development is appropriate under that framework.

15. This NPS is particularly relevant for the development of strategic rail freight interchanges. DfT and DCLG did issue helpful guidance in November 2011, but this has no statutory weight and, in a planning application, would command less weight than documents such as local plans. Developers are therefore in a difficult position if proceeding with applications under the Planning Act without the underpinning documents.

16. Whilst it is possible to proceed without the NPS, the additional uncertainty is unhelpful. The Planning Act regime whilst an improvement on the previous regime, is expensive particularly up front, and requires significant time and investment, and developers need to consider the risks against other potential investments in the UK and elsewhere. We would therefore support the publication of the NPS at the soonest opportunity.

17. The NPS might also be expected to be relevant to certain rail upgrades, although the majority can be completed under permitted development rights.

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

18. Historically regional structures could and did play a significant role in helping to develop links to and from ports. SEEDA, in the south east, were heavily involved as a funding partner in making the case for gauge clearance from Southampton, and there are similar examples elsewhere.

Funding from One North East, which has now been abolished, is being used to part fund gauge clearance to Teesport with the remainder being funded by the Strategic Freight Network Steering Group.

19. There is little evidence of LEP’s engaging on rail freight or on the development of transport links spanning regions and we have had virtually no engagement. This is not surprising given their lack of funding, powers and knowledge about rail freight

20. For a national operator such as DB Schenker, it is simply not practicable to establish a meaningful relationship with all LEPs or Local Transport Boards.

21. It was easier, but still a considerable challenge, to establish and maintain relationships with (eg) RDAs.

22. We note that DfT have consulted on how funding, and decision making for sub national transport schemes might be devolved to new Local Transport Bodies. So far, we are not clear how such a move might take place, and what accountability and responsibility such bodies might have. Certainly, the need to consider regional and national links must be a requirement if suitable linkages to ports are to be progressed.

23. DfT are also considering devolution of rail franchises, eg to regional and local bodies. Such organisations could play a role in promoting rail freight and links to ports, if their remit and constitution covered this. Indeed Centro, the West Midlands PTE, has been pro-active in developing a rail freight policy.

24. However it would be important that any devolved body was able to put the requirements for rail freight into a national/international as well as local context. It is not clear to DB Schenker how readily achievable this would be. It is this balance between local impact and interest (which is real and readily apparent) and national/international interest (which is often less apparent) that is at the heart of why local authorities and bodies support rail freight in principle until some development in their area is required.

25. The fact that many of the benefits of rail freight lie outside the railway balance sheet and are not always tangible, is a further complication.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

26. Experience of developing services from regional ports demonstrates that a critical factor is ensuring that there is sufficient suitable volume to justify trainload services. There is very limited scope within the UK for less than trainload rail volumes, so historically a key determinant has been the ability of a port to justify daily rail services. The need for sufficient volumes applies to both containerised and bulk traffics.

27. Investment in suitable loading and unloading facilities, and the development of rail connected warehouses by major retailers, are all essential prerequisites for further rail growth and modal shift from road. This means that ports have to continue to invest, and the private sector needs confidence to provide the inland terminal capacity. In principle there is no shortage of private sector investment funding for such schemes.

28. Government is effectively giving a lead to this process by the SFN investment. This is only available over five year periods giving the Railway’s funding cycle, but represents a major improvement for rail freight funding from the historical position.

29. Rail currently has a market share of c25% from Felixstowe, and closer to 40% from Southampton. The market share at Southampton has increased significantly since the opening of the gauge cleared route, which has improved train utilisation and loading. There is no reason to suppose that market share from Felixstowe should not achieve comparable levels, particularly given the investment which is expected during the next control period. Equally there is no reason why the port at London Gateway, set to open during Q4 2013, should not achieve a similar rail market share.

30. Bulk market shares for commodities such as coal and iron ore can be much higher, as the significant volumes involved make rail the favoured mode of transport. In general there are fewer growth opportunities in bulk as rail is already heavily involved.

31. In other sectors, such as steel, there are opportunities for rail growth dependent on volume throughput and the availability of suitable rail loading points.

Are there any regulatory barriers to investment in ports ? What could and should be done about them ?

32. The development of Biomass is the significant bulk opportunity at ports. Development of appropriate loading equipment at ports and unloading equipment at power stations, as well as supporting infrastructure and equipment such as wagons will be needed. Provided that the commercial environment established by Government is sufficient, private sector funding could be forthcoming for this.

33. The recent announcement by the Office of Rail Regulation that they intend to introduce new Freight Specific Charges from 2016 for rail freight traffics that the ORR has decided can afford them, has raised potential regulatory issues.

34. Rail freight customers, especially those who are effectively dependent on rail freight, remember with apprehension the similar pricing policy adopted by British Rail in the lead-up to privatisation in the early 1990s. Customers felt then that they were being exploited because they were seen as captive and the result was a negative environment that mitigated against growth and investment.

35. It will be important that the ORR’s charges do not lead to a repeat of this environment, especially if the ORR decides to introduce a Freight Specific Charge for the key growth market of Biomass.

36. The evidence of the early 1990s was that the impact on the sector was much wider than the specific customers and commodities targeted. Customers in other sectors were apprehensive that they might be subject to future price increases that in turn might negate the anticipated return on any investments.

37. In an environment of new Freight Specific Charges, it will be important for customers in other sectors to be given the confidence that they will not be treated as captive in future Periodic Reviews. ORR has to find a mechanism to give such assurance for a sufficient period into the future that private sector investment can still be confidently made.

January 2013

Written evidence from Yorkshire and Northern Lincolnshire APPG (PA 18)

INTRODUCTION AND SUMMARY

The All Party Parliamentary Group (APPG) for Yorkshire and Northern Lincolnshire has been formed by MPs to bring together key industry, public sector and Parliamentary voices, to debate and reach some practical agreement and conclusions on the critical issues impacting on the future growth and prosperity of the region.

There are a number of major ports, critical to UK trade, located in Yorkshire and Northern Lincolnshire, the largest and perhaps most well known are those at Kingston Upon Hull, Grimsby & Immingham (the UK’s largest by tonnage), and Goole.

Beyond these there are numerous smaller port and wharf facilities along the banks of both the Humber and Trent rivers (e.g. Howden, Keadby, Hessle and Barrow Haven, as far inland as Selby); as well as a number of harbours/landings along the North Sea Coast (e.g. Whitby, Scarborough, Filey and Bridlington). These remain critical to their local economies, as both active commercial operations and as important visitor economy/heritage sites. Though perhaps less significant in size and output terms, the economic linkages between these smaller facilities and the major ports along the Humber are critical in supporting valuable economic clusters and supply chains, particularly in terms of the growth potential in off-shore wind power generation and wider green, renewables and energy sectors. Such linkages are therefore being actively explored by the relevant local authorities and Local Enterprise Partnerships (LEPs) covering these localities.

It is also worth drawing the Committee’s attention to the major proposal from Able UK to create a new, 819 hectare, 2.5 mile-long deep water river frontage, for port related activity along the South Bank of the Humber. The Able UK Humber Port proposal involves the possible investment of around £100m in a combined Logistics and Business Park alongside a Marine Energy Park and over 1,000 metres of new quayside to help support the burgeoning renewable energy sector1.

At a meeting of the APPG on the theme of “Transport for Yorkshire” on 11th September2, also attended by Louise Ellman MP, it was emphasised that the Transport Select Committee should hold a full Inquiry into the country’s ports infrastructure, given the enormous importance of ports for both the existing and future economic success of Yorkshire, Northern Lincolnshire and the wider UK. The APPG is therefore delighted that this inquiry into “Access to Ports” is being held.

This submission, on behalf of the APPG, does not aim to address all of the specific questions posed by the Committee in detail (more detailed submissions have been provided by organisations such as Hull City Council and Associated British Ports, for example). Instead it draws upon the recent discussions amongst MPs and stakeholders, to reinforce the importance of the region’s ports infrastructure. It also emphasises the considerable untapped potential to expand these ports further, to generate the growth and jobs so urgently required in the current economic and fiscal climate; as well as to actively support the positive rebalancing of the UK economy, away from financial services, for example, and the over- heated London and the South East, towards a model of advanced manufacturing-led growth and employment generation. In this regard, greater Government support for ports expansion

would address directly the priorities of the Coalition Government’s blue-print for growth, as set out their Local Growth White Paper3.

By Government working more effectively, across Whitehall Departments – DfT, DECC, BIS, DWP and DCLG all have a stake in this agenda – it will be better able to support the vital role of Yorkshire and Northern Lincolnshire’s ports in boosting local economies, enhancing connectivity, expanding inward investment and increasing export-led growth. Such greater co-ordination and support from Government would be instrumental helping local economies to grow themselves out of a downturn that is impacting disproportionately across the North.

It will also be important for the Select Committee’s inquiry and final report to reflect the unique potential for an uplift in ports capacity in Yorkshire and Northern Lincolnshire, to support multi-million pound investment in critical sectors such as renewables - the economic and employment benefits of which risk being lost to the rest of Europe without clear and coordinated Government strategy and support.

WHAT SHOULD BE THE PRIORITIES FOR IMPROVED ACCESS TO PORTS?

• Firstly, it must be emphasised that the economic impact of UK ports as a whole is highly significant. A recent study has assessed that the sector directly employs 117,000 workers; contributes £7.9 billion to UK GDP; generates £2.0 billion in tax receipts to the UK Exchequer’ and generates large multiplier impacts4.

• The “Humber Ports” form the UK’s largest ports complex, handling 16% of all England’s sea freight and exporting more goods to Worldwide destinations than any other UK port complex. The Humber Ports play an important pan-regional role, providing access for general cargo to the Northern Continent, Scandinavia and the Baltic; and the hinterland of the Ports extends far into the Midlands, Scotland and into the South East.

• The Humber Ports are also in an unique position to become the primary English hub for the manufacturing, installation and servicing of offshore wind turbines. For this reason the Humber Ports have been designated as one of five Centres for Offshore Renewable Engineering, with local partners working with Government to unlock barriers to growth.

• Whereas the traditional growth driver for the Humber Ports has related to coal, the critical economic growth driver for the future will be the development of the offshore wind industry and wider specialisations around the energy and renewables sectors, with the Humber Ports constituting England’s – and possibly the UK’s – largest cluster.

• Given these clear and unique economic benefits - both for Yorkshire, Northern Lincolnshire and the rest of the country - the issue of enhancing access to the ports is fundamentally important, with particular focus needed on improving road and rail links that will unlock their full growth potential (i.e. not just traditional ports-related activity), support the rebalancing of the UK economy, and at the same time recognising the critical role of ports in facilitating low carbon, secure and renewable means of power generation.

IS THE DELAY IN PRODUCING A NATIONAL POLICY STATEMENT FOR NATIONAL ROAD AND RAIL NETWORKS CREATING PROBLEMS FOR IMPROVING ACCESS?

• The role of National Policy Statements in providing strategic and integrated direction for the use of scarce public resources in the field of transport can be extremely important. For vital investment projects to generate the full employment and economic prospects they promise (and which are so badly needed locally), it is critical that wider public sector infrastructure investment can be effectively targeted and aligned.

=== • In this regard it is also important for potential road and rail investment schemes to be measured in terms of their economic benefits, not simply in terms of local traffic flow, congestion, journey times etc. The National Policy Statements must address economic growth benefits directly, if they are to going to inform the right kind of investment decisions that will support local communities.

• It is known that potential major foreign investors investigating sites for new developments in the renewable energy off-shore wind sector have expressed concern, for example, about the poor quality of rail services (frequency, running speeds and reliability) between potential investment sites and international airports. This highlights the need for public investment to be targeted towards integrating road and rail schemes that recognise their central role in driving economic growth, and which also reflect directly the most important local priorities.

• A number of particular road and rail improvement schemes across Yorkshire and Northern Lincolnshire are being seen as important for the National Policy Statement to make specific reference to - this is not an exhaustive list, but they include:

o The upgrade of the A63/Hedon Road/Castle Street connection to the Port of Hull o Increased rail capacity to accommodate biomass traffic from Immingham to the region’s major power stations, such as Drax o Rail gauge enhancements to increase rail’s share of container traffic o Electrification of the Hull to Selby and East Coast Mainline links further west, to join with the confirmed Cross Pennine electrification o Improved rail and road (A64) capacity from York and Leeds to the Yorkshire Coast

HOW SATISFACTORY ARE THE CURRENT AND PROPOSED DECISION-MAKING STRUCTURES, INCLUDING LOCAL TRANSPORT BOARDS?

• Most of the major transport links to Ports are either the responsibility of the Highways Agency or Network Rail and therefore fall outside the formal remit of any Local Transport Board (LTB). Nevertheless, robust LTB proposals are being worked-up across Yorkshire and Northern Lincolnshire, whose priorities will, inevitably, encompass such strategic transport issues. It is seen by industry as important that LTBs have a focus on both freight and passenger transport.

• There is a view, however, that the proposed funding to LTBs is likely to be of a scale too low to seriously address the fundamental problems of poor access to ports. For example the Humber Local Transport Board is expecting to receive in the order of £20m to spend in total, across four local authority areas over a four year period (2015-19). The scale of the rail investment required across the north Humber area alone is around £100m.

TO WHAT EXTENT CAN INVESTMENT IN ROAD AND RAIL INFRASTRUCTURE INFLUENCE THE MARKET AND REGIONAL DECISION-MAKING?

• Evidence provided by the UK logistics industry demonstrates that one of the core areas in which Government can play a significant part in increasing the productivity of UK industry is to improve the longer term capacity, performance and resilience of congested road and rail networks and, in doing so, also improving connectivity to ports5.

• However, the overall lack of major investment in transport capacity in Yorkshire and Northern Lincolnshire, despite a range of innovative and bespoke alternative solutions being adopted, is causing strain on an already ‘highly stressed’ part of the network. Peak hour capacities have already been reached at key junctions, leading to delays, congestion, air pollution and traffic spreading. For investment and growth to occur – which is particularly pressing when considering Hull’s JSA claimant rate of over 8%, for example -

=== a long-term solution is now required which needs to deal with historic underinvestment the need for major new road and rail infrastructure.

• In general transport investment terms, it should be noted that, between 2005 and 2011, Yorkshire and Humber received just 7% of total Government transport investment, averaging at £239 per person. This can be compared to £915 per person in London and the South East, which received 48% of all investment6. This long term disparity in investment needs to be turned around, particularly when considering the unique growth potential and capacity presented by the ports in this region.

ARE DECISIONS ON PORT DEVELOPMENT TAKING SUFFICIENT ACCOUNT OF THE TRAFFIC GENERATED BY PORTS AND ASSOCIATED DEVELOPMENT NEEDS?

• Decisions at the National level may also need to recognise the potential for the Humber Ports to offer shorter, faster, more efficient, direct and convenient links from the North to much of northern Europe and Scandinavia, thereby relieving some of the pressures around the highly congested Channel Ports routes. It is seen that this could be achieved with relatively modest investment and negate the need for further, more expensive infrastructure investments in the South East. It could also deliver national economic and environmental benefits by reducing transport costs and vehicle emissions. It would be helpful for the Committee to question DfT on how it is approaching such issues.

HOW REALISTIC ARE CURRENT ASSUMPTIONS ABOUT RAIL’S MODAL SHARE OF PORTS TRAFFIC? UNDER WHAT CIRCUMSTANCES COULD RAIL FREIGHT OR INLAND SHIPPING PLAY A GREATER ROLE IN REDUCING PORT-RELATED ROAD FREIGHT?

• In order to achieve the potential for growth in rail freight to/from the Ports in Yorkshire and Northern Lincolnshire, gauge enhancements are needed to allow the carriage of deep sea containers. Feedback from stakeholders suggests, however, that Network Rail’s business cases are constrained by considering primarily existing users. It is felt that some degree of speculative investment, based on a more strategic approach, is likely to attract more investment.

• A specific example where rail freight capacity needs to be addressed is connecting the Humber Ports to the region’s major power stations, so that more biomass can be moved by rail. Drax, for example, is planning to fully convert three of its six boilers to 100% biomass in 2013. Eggborough Power Station has similar plans, with total extra capacity around the region able to accommodate an additional 5,000 trains per year by 2020 – around a 50% increase. There may even be a role for inland shipping in this regard.

• Taking freight off congested roads and moving it by rail or water can be more expensive. To help address this DfT runs two schemes that encourage the use of water (or rail) transport instead of roads: the Mode Shift Revenue Support scheme and Waterborne Freight Grant scheme (worth around £19m per year). They rely on bids from businesses considering using waterborne transport; however, they tend to direct funding towards existing firms in established locations, based on road networks. A shift towards an “incentive” scheme, targeted more closely at the “location decision” stage for new business would be welcomed. Information and awareness of these schemes is also often lacking, with funding levels not seen as generous. It would be helpful for the Committee to press DfT on its plans for enhancing these schemes and maximising take up.

January 2013

===

Written Evidence from The Freight Transport Association (PA 19)

1. The Freight Transport Association (FTA) is one of the UK’s largest trade associations representing over 14,000 companies in the UK engaged in freight transport. Our members range from logistics companies, retailers and manufacturers covering all modes of transport-road, rail, sea and air. FTA members operate approximately half of commercial goods vehicles and vans operated on UK roads and represent 90 per cent of goods moved by rail and 75 per cent of goods moved by sea and Air. FTA has also taken responsibility for promoting mode shift and co-modality strategies on behalf of UK industry, including the running and management of Freight by Water.

2. Whilst some FTA members are port and terminal operators, the main focus of FTA’s ports policy approach is determined by the needs of port users, e.g. British industry as users of ports and terminals and the nation’s transport infrastructure.

What should be the priorities for improved access to ports, and why?

3. Maritime transport is responsible for carrying 95 per cent of the UK’s external trade (imports and exports). Ports therefore play a critical role in the international maritime supply chain. Efficient ports and adequate and reliable inland road and rail infrastructure are a vital component in UK industry’s capability to compete internationally. While world trade in goods has slowed in recent years due to the global economic recession, trade in goods has grown over the long-term by an estimated 1.3 and 3.4 x GDP (depending on the economic and trade conditions). So, while trend growth levels are likely to see slower forecast levels for the next few years global trade will continue to grow at more than GDP. UK industry will consequently depend on adequate investment in road and rail infrastructure investment to and from the UK’s major ports in order to remain competitive in the international market place. FTA believes therefore that the forecasts in the National Policy Statement for Ports of traffic growth of a doubling of ro-ro traffic and an increase of 182% in container traffic between 2005 and 2030 remain robust and realistic.

4. The importance of international gateways was identified in the Eddington report commissioned under the last government. FTA agrees with the key conclusions of the Eddington report, particularly the report’s assessment that investment in road and rail infrastructure to and from ports represents exceptionally good value for public money, and rather than spending on large grandiose prestigious schemes the concentration should be on improving the basic transport network. We agree with that, and for the reasons set out above believe investment should be prioritized towards links to ports.

Is the delay in producing a national statement for national road and rail networks creating problems for improving access to ports?

5. The Eddington report recommendations made clear that government needed to ensure that the delivery system is ready to meet future challenges. In essence, this means that industry requires firm and longer term assurance on key transport infrastructure investment priories. Given Eddington’s recommendations and the current Highways Agency independent review into enhancing and funding the strategic road network, the government has plainly accepted that there is a need for a longer-term approach and commitment to national infrastructure investment. Moreover, the government has recently signalled its understanding that transport infrastructure investment is essential for stimulating growth. However, the lack of national policy statements for road and rail networks has created uncertainty and concern about a long-term commitment to road and rail priorities and is undermining confidence in future funding for those priorities in the context of the up-coming comprehensive spending review. Unless industry has confidence the key schemes identified by industry (see attached annex- FTA briefing: investing in rail freight:2014-2019) are confirmed in national statements doubts will persist about commitment to enhancing the quality of the UK’s international links and its understanding of the need for a long-term strategic approach to infrastructure priorities and investment. This in turn will undermine international confidence in Britain’s capability of delivering a world-class transport infrastructure, thus widening the gap with our competitors and threatening inward investment.

How satisfactory are current and proposed decision- making structures, including Local Transport Board

6. These are new structures, so inevitably there is concern about how Local Transport Boards and Local Enterprise Partnerships will work and interact and how they will be able to cope with local infrastructure investment decisions which are of national significance. FTA is also concerned about the tight timetable for setting up these bodies. FTA is further concerned about how these bodies will co-operate across local and regional boundaries and whether they will have sufficient expertise to deal with complex local, regional and national transport infrastructure investment and planning decisions vital to the freight industry. It seems to FTA that this is an area which needs national government oversight and advice. Clearly, national statements on ports and road and rail infrastructure would provide invaluable guidance and support to LEP and LTB’S. In this respect, the National Infrastructure Plan 2011 recognised that the UK’s national infrastructure is a system of increasingly inter-dependent networks-which is especially relevant to ports which are an integral part of the nation’s national and international trade networks.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

7. National policy statements should guide all potential infrastructure development-not just those that qualify as Nationally Significant Infrastructure Projects (NSIPs). Many new developments and extensions to existing facilities which are too small to count as NSIPs could greatly enhance UK port capability. The National Ports Policy statement states that port development must be responsive to changing commercial demands and the government considers that the market is the best mechanism for getting this right, with developers bringing forward applications for port developments where they consider them to be commercially viable. As UK ports are entirely privately run and funded we believe that is absolutely right as development must be market-led to deliver the Uk’s needs now and in the future. Clearly, in any future investment decision linking hinterland road and rail infrastructure will be a key influence on port infrastructure investment. For example, investment for the new DP World London Gateway port development would have been unlikely to have been forthcoming without the decision to build a new rail head and good road and rail access to the strategic road and rail networks. It therefore follows that when port development is thought appropriate, local planners must be aware of the effect that it will have on their local and rail networks and plan accordingly.

Are decisions on port development taking sufficient account of traffic generated by ports and associated development needs?

8. The National Ports Statement set out criteria for traffic impacts and as ports are market- led they are likely to work closely with the highways agency, Network Rail and local authorities on the traffic likely to be generated by port development.

How realistic are the current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail or inland shipping play a greater role in reducing port-related road traffic?

9. The nation’s major container ports roughly account for 50% of containerised intermodal rail freight movements. And there are increased opportunities for coastal shipping transhipment particularly to Scotland. With rail gauge enhancements, greater intermodal terminal facilities and the development of 9’ 6’’ containers it should be possible to increase rail modal share. On behalf of UK industry FTA is leading Freight by Water (FbW) and has developed a Modal Shift Centre to provide information on rail and water solutions and to assist industry in using alternative modes. For example, FTA’s FbW website provides an interactive map highlighting the wide range of water service available throughout the UK, see http//freightbywater.fta.co.uk.

Are there any regulatory barriers to investment in ports? What could be done about them?

10. Not withstanding the government’s “localism” agenda and devolved decision-making inherent in this approach, planning arrangements still present some difficulties in investment. FTA believes that there should be one single consent unified planning regime and that the decision-making process should be speeded up. Other barriers for investors include DfT’s Funding Transport Infrastructure for Strategically Significant developments. FTA believes that the requirement for port developers to provide a significant contribution to the costs of road and rail connections is likely to be a major disincentive for port investment. This can place UK port development and investment at a considerable disadvantage compared to the UK’s continental competitors where arrangements do not exist.

January 2013

Written evidence from Port of Tyne (PA 20)

What should be the priorities for improved access to ports, and why?

Key points

Efficient and effective connectivity to the Port of Tyne is a key success factor and this applies not only to sea but also is provided by road and rail.

Ports should be viewed as akin to process industries, to which to and from journey time reliability is critical. When times are unpredictable, hauliers are forced to allow for this uncertainty, wasting time and may arrive earlier adding to queues or parking in holding areas outside the Port.

Port traffic is typically medium and long distance – meaning that, whilst the costs of congestion converge on the immediate Port neighbourhood, benefits are widely dispersed. Pinch points should be addressed, taking account of total journey time benefits at the wider network level.

Efficient and effective connectivity to the Port of Tyne is a key success factor and this applies not only to sea but also is provided by road and rail. The Port of Tyne has contributed to the “North East Business Transport Priorities” document which has been co-authored by the North East CBI and the North East Chamber of Commerce and transport developments proposed should also be seen in the context of this document. The following requirements in respective of road, rail and sea connectivity are based upon the “North East Business Transport Priorities” document but with added detail in respect of rail and sea connectivity.

Road Immediate (now being progressed): • Junction improvements on A1 Western By-Pass • Continuation of previous government’s scheme to upgrade A1 Barton to Leeming. • Improvements to the A19 junctions with the A689 and A174

Short Term • Removal of roundabouts on A19 on either side of Tyne Tunnel • Improved road access to Port of Tyne. Improvements to road infrastructure in the immediate vicinity of the Port should be seen as a priority, in particular the dualling / realignment of the A185 which connects the A19/Tyne Tunnel with the Port and is an essential gateway to the borough of South Tyneside.

Medium Term • Alterations to A1 junctions with A194 (& A184) & A19 to create Tyneside ring road • Upgrading of A1 Western Bypass (three lanes N & S) • Improvements to A19/A1231 Junction

Long Term • Dualling of A1 North to Scotland

• Dualling of A69 to M6 • Adding third lane to A1(M) Southwards.

Rail

The most economic use of rail capacity requires careful consideration – especially where networks are congested and have a vital trade and economic development role to play in serving Britain’s ports. The use of scarce train paths for freight and passengers should be balanced. Where there is a demand for more freight use than the supply available, the alternatives are transfer to road (environmental dis-benefit), increased night time running or failure to meet industry needs (loss of jobs). There may be more flexibility in the options for catering for rail passenger traffic. A holistic approach is advocated.

Rail capacity is crucial for cargoes being transported to or from Port of Tyne and must be increased to facilitate the capture of market growth opportunities that already exist today. More than 80% of the cargo handled by the Port is currently loaded on to rail for onward transportation (predominantly coal and wood pellets bound for Yorkshire and beyond). The Port has an opportunity to expand this business stream significantly and requires major investment in rail infrastructure to fully exploit the opportunities. These improvements are required at local, regional and national levels:

Local • Doubling of both Boldon East and Boldon West Junctions - Increased wood pellet and coal traffic, via both Durham Coast route and Pelaw/ECML, means these junctions are now becoming bottlenecks. Investment is required to dual these lines in order to improve capacity. • Loop on Tyne Dock branch - A loop on the Tyne Dock branch between the Network Rail boundary and Boldon North Junction is needed to support the increase in all traffic out of the Port. - Re-instatement of a rail line into the Port’s north estate to facilitate seaborne trade opportunities on the north bank of the Tyne. Regional • ECML capacity – Leamside Line re-instatement - With predicted increases in wood pellet traffic out of the Port (the Port is currently investigating the potential for investing in new handling facilities) even more capacity is needed than the ECML and Durham Coast route can offer. The re-opening of the Leamside route (Pelaw Junction to Tursdale Junction via Washington and Penshaw) will be needed to handle northern ECML freight heading south, freeing up paths on the ECML for Tyne Dock traffic heading south via Birtley. National • East Coast Main Line (ECML) capacity - The Port supports all proposals for creating more capacity for freight traffic along the ECML to facilitate the movement of additional freight into and out of the region. As far as is possible, a stand-alone strategic freight network is the

preferred option and the rapid expansion of wood pellet traffic, in volumes not previously anticipated, must be catered for urgently. • Additional signals between Milford Junction – Knottingley – Drax - One of the most serious bottlenecks for coal and wood pellet rail traffic in the north of England is the section of route from Milford Junction via Knottingley to the Aire Valley power stations. Currently, there is likely to be insufficient capacity to cater for the increased wood pellet traffic required at Eggborough and Drax (each important customers of the Port) for co-firing with coal thereby hindering the Port’s ability to compete with more southerly ports.

- Additionally, Network Rail is continuing to develop a freight network with a W10 (2.5m width) loading gauge capacity. The current delivery period will bring this level of capacity (W10) for Teesport and Port of Tyne to Scotland thus boosting capability to move freight. This will connect with W10 routes to Felixstowe, London Gateway, the Midlands and Southampton. Sea Efficient and effective connectivity to the Port of Tyne is a key success factor and this applies not only to sea links, but also to those provided by road and rail as outlined above. As a tidal river, the Tyne requires planned maintenance dredging to maintain the depths required to accommodate today’s shipping. The Port of Tyne recently completed a capital dredge programme (£5m) to deepen the water at its own berths and in the channel to a level of 13m, the deepest it has ever been. If this is maintained, the Port will continue to be able to accommodate 86% of the world’s cargo ships. However as demand to accommodate large scale, fully laden vessels increases, the Port will look to dredge deeper its own berths.

River estuaries, vital to ports, are typically public goods. The costs of upkeep are often met by the ports but the benefits are wide and cannot be ring-fenced. Maintenance dredging is a case in point - the Port of Tyne pays - a wide range of industry benefits.

Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where?

Delays are not helpful. Certainty in long term planning will boost private sector confidence. All efforts should be made to do everything to create the most positive environment for new investment and encourage our initiatives in growth sectors (such as renewable energy support).

Planning

A stable and responsive planning system is crucial to attracting investment. The spirit of the recent changes through the Localism Act 2011 to the Nationally Significant Infrastructure Projects (NSIP) system and the publishing of the National Planning Policy Framework are welcome. As the Port brings forward renewable energy developments, public bodies will need to work together with the Port to achieve its aspirations.

We do not feel that a delay in producing a NPS for National Road and Rail Networks is creating problems for improving access to ports, but it does impose delays on decisions for transport funding. Spending for transport remains stable, therefore the maintenance of roads is likely to be reduced. The maintenance of roads is crucial for ports.

How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

Renewable Energy related investment

Clear, long-term national energy policy is crucial to help the region capitalise on the UK’s drive to de-carbonise with all the associated economic benefits. It is imperative that the Government maintains a stable regulatory and fiscal environment to allow businesses like the Port to attract inward investment – whether large scale offshore wind manufacturing to service Round 3 opportunities, or providing enough capacity for power generators who require expertise in handling and storage of the new renewable fuel, wood pellet. Now the Renewable Obligation Certificates regime has been set in the short-term, the Port hopes that the Contracts for Difference regime contained in the recently published Energy Bill will provide further long-term stability to encourage capital investment.

Sulphur Emission Control Areas

The International Maritime Organisation has adopted new regulations to reduce drastically the amount of sulphur emitted from ships in Emission Control Areas through new regulations coming into force from 2015. These regulations will see an increase in fuel costs of up to 87% for ships operating off the southern and eastern coasts of the UK. It is feared that for many freight and passenger shipping companies this cost will be too great to bear and routes could be put at risk. If routes do close, or if the increase in costs is passed on to customers, the consequences for jobs and growth could be profound, not just for shipping companies and ports, but to all those factories, warehouses and plants that rely on ships operating from their local port to move their goods. At a recent EU Transport Council of Ministers meeting on 20 December 2012, the Government sought to create a coalition in the pursuit of temporary and defined exemptions from the sulphur limits, including some routes to and from the Port. The Port supports this initiative. Rail Freight Access Charges The Office of Rail Regulation has announced a new package of charges for freight operators to access the rail network, to be introduced from 2016.

The decision means that the variable access charge, paid by all freight traffic, could increase by over 20% on today’s level. Certain commodities (coal to power stations, spent nuclear fuel and iron ore) will also pay the predicted ‘freight specific charge’ phased in between 2014 and 2019. A decision on charges for biomass traffic has been deferred pending further consultation.

From the Port of Tyne perspective both charges are creating uncertainty in the respective markets that these cargoes serve and also are likely to negatively impact the Port of Tyne’s competitive position.

The decision will make the structure of charges complex and is disproportionate in terms of the likely revenue raised. It could place rail freight at a further structural competitive

disadvantage and will inject considerable regulatory risk into sector.Offshore wind turbine manufacturing development Port infrastructure development to capitalise on the opportunities associated with the manufacture of offshore wind turbines is likely to require not only the support of, but also financial contribution from Government. This needs to be made available transparently and demonstratively to secure potential inward investment.

Transport It is too early to judge if Local Transport Boards are going to be effective. It is crucial that the Local Transport Boards stick to their ambitious timetable to secure funding.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

Support of “regional” ports (outside the South) can pay social policy dividends (taking account of the shadow costs of employment generation/preservation) whilst reducing the need for more infrastructure investment in already over-heated regions. (e.g the A14). We recognise the need for policy balance, supporting market demands, but equally, good quality supply of port facilities and supporting infrastructure will create its own demand in the medium term. Sea miles are environmentally more acceptable than land miles. Economic stimulus to the regions is much required; we would support a fresh look at these issues.

Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

In our case yes, so far. Ports need buffer stocks of vacant or semi vacant estate – to enable quick response to changes in bulk land requirements, for storage and modal transfer. Top quality water and land access links are essential. There can be pressures to develop - creating uses that may not be in the best long term interests. And ports can be subject to landside and marine-side planning laws, curbing flexibility, increasing response time and adding to their transaction costs.

Yes – there is a section measuring traffic impact in the National Ports Policy Statement.

Rail’s modal share has grown by a third through containers and bulk but passengers remain a priority on the congested rail network. Therefore, we do not have high expectations that rail can provide sufficient capacity for rail and freight.

Are there any regulatory barriers to investment in ports? What could and should be done about them?

Planning There are barriers to development due to the planning regime and environmental constrains. S106 agreements and conditions also provide barriers to port development and investment. The DfT ‘Funding Transport Infrastructure for Strategically Significant Developments’ states new port developments requiring new road and rail connections would require a financial

contribution from the port. This situation is unique to the UK as other counties would receive public funding.

January 2013

Written Evidence from GB Railfreight (PA 21)

GB Railfreight (GBRf) is one of the most dynamic companies in the railway industry. It is a rapidly growing business, having gone from 2 employees in 1999 to over 400 staff today, and it operates around 650 trains a week in the UK. This growth has been possible by the application of commercial principles to the rail freight industry. GBRf welcomes this inquiry as an opportunity to further open the market to competition.

GBRf operates from the ports of Tyne, Immingham, Liverpool, Felixstowe, Redcar, Blyth, Bristol, Southampton, Hull, Cardiff, and Teesport. Ports are the life source of our business and it is crucial that they are readily accessible to bulk and multimodal rail freight to allow them to work at maximum efficiency in order that they can be utilised to their full potential.

Rail freight is one of the most effective ways to transport goods across the country and, as such, is vital to the smooth running of Britain’s economy. Indeed, it is responsible for moving over 100 million tonnes of goods across the country every year.1 In order to keep the economy moving, it is essential that UK policy-makers at all levels create suitable conditions for rail freight operators to access UK ports and for investors to make long-term decisions to support growth and jobs.

The economic significance of the rail freight industry, and therefore the importance of proper access to ports, should not be thought of in terms of running trains; it should be measured against each commodity we deal with:

Intermodal: Overall, 28% of deep sea containers that arrive or depart from the major ports are transported by rail.2 However, it is not just container traffic that is important. Other commodities which rail freight transports are crucial to the economy (see 1.4.1 – 1.4.7). Coal: Gas prices are so high, coal has become 40% of the UK energy source, 50% at its peak. GBRf hauls 30% of the coal haulage on our railways. Biomass: Biomass offers the UK a renewable, low carbon fuel and can help significantly reduce the net carbon emissions when compared with fossil fuels. With biomass representing a crucial future replacement to coal in the UK, and equating to two-thirds of the density of the fossil fuel, it is essential that the right conditions are set to ensure suitable rail freight transportation of biomass in the future. Petroleum: GBRf works with Greenergy, a leading supplier of petrol, biofuel and diesel, to haul its road fuel around the UK. Greenergy supplies around a fifth of the UK’s entire road fuel, making 120,000 deliveries per year to supermarkets, oil companies and forecourts. Retail sector: The retail sector is now looking towards rail to offer environmentally sound, economically efficient logistics solutions as part of its supply chain package. Rail is now performing the trunk movement from import point to distribution centre, with road performing the final delivery to stores like Tesco.

1 Office of Rail Regulation, National Rail Trends, October 2009 2 Office of Rail Regulation, Freight access charges consultation document, 2012. Found at: http://www.rail- reg.gov.uk/pr13/PDF/freight-charge-consultation-may2012.pdf Aggregates: The only way to build our economy and infrastructure up is through the efficient transfer of construction projects. An example of this is Heathrow Terminal 5. Infrastructure: The rail freight industry facilitates both the maintenance and renewals of the rail networks for Network Rail. Indeed, Network Rail is the single biggest customer of the freight industry.

Delays to motorway traffic are increasing as network congestion increases. If the economy is to grow, we need to create capacity for rail freight movements and remove traffic from the roads. INRIX suggests that congestion on the roads currently costs the UK economy £4.3 billion per annum. In terms of lost time to the commuter, this cost amounts to £331 for each individual, or £2.7 billion in total. Meanwhile, hold-ups to business or freight vehicles amounts to £1.1 billion annually being added to household costs. 3

In order to grow the UK economy, the freight industry requires full, intelligently coordinated access to ports. However, there are currently three main barriers that stand in the way of rail freight’s access to ports that policy-makers need to consider. In summary, these are:

The rail freight industry needs an aligned growth strategy and investment plan for ports and rail as one system: The freight industry is suffering under decision-makers who lack a joined- up approach to policy making on ports.

Policy-makers need to understand freight not in a standalone manner but as part of a wider economic conversation: The rail freight industry acts as a gateway for aggregates, retail, energy and other sectors of the UK economy to grow. It is essential to facilitate their growth in the right manner by supporting the rail freight industry.

The rail freight industry needs a regulatory regime that promotes competition: Allowing particular companies to hold control of ports is stifling the growth of rail freight and the economy as a whole.

Chapter 2: What should be the priorities for improved access to ports and why?

2.1 The number one priority for improved access to ports should be an aligned growth strategy and investment plan for ports and rail as one combined system. Ports are the key source of demand for the rail freight industry and suitable investment therefore needs to be clustered around this source. However, the existing piecemeal approach that has so far driven investment in the key rail freight corridors serving the UK’s strategic ports has meant that certain aspects of a corridor are invested in without due cognisance of the whole route. In addition, this approach has appeared to randomly prioritise particular ports and commodities at the expense of others.

2.2 This piecemeal approach is reflected in the historical mismatch between the Department for Transport’s (DfT) policies and priorities in comparison to the privatised port owner’s investment plans to improve efficiency in handling freight volumes.

3 The Telegraph, Traffic congestion costs UK economy £4.3 billion a year, 10th December 2012. Found at: http://www.telegraph.co.uk/finance/newsbysector/transport/9734126/Trafiic-congestion-costs-UK-economy-4.3bn-a- year.html#

2.3 For example, there has been considerable investment directed by the DfT and implemented by Network Rail in the infrastructure on the freight route from the port at Southampton to the distribution centres in the Midlands and the North. Paradoxically, ABP at Southampton have not invested in quayside railway facilities as they do not regard the risk as being worthwhile.

2.4 The port of Felixstowe is another clear example of a lack of alignment in investment plans at UK ports. Felixstowe’s planning permission for the second stage of the dock development was granted on the basis of the port paying for partial double-tracking of the branch line from Ipswich to Felixstowe. This second stage has not yet started (leaving only a single track 10-mile branch line to serve the port), there are seemingly no plans to rectify this, and there is no legal obligation on the port to double track the branch. This is despite Hutchinson Port Holdings Group, the owners of the port, investing £40 million in a new rail terminal to support its business growth. Chapter 3: Is the delay in producing a National Policy Statement for National Road and Rail Networks creating a problem for improving access to ports? If so, in what ways and where?

3.1 A fully coordinated approach to ports and rail policy is necessary in order to ensure that their contribution to the national economy is maximised and that port operators, local authorities and others are aligned on their objectives. A National Policy Statement for National Road and Rail Networks could help to play a role in ensuring that this happens, and any delay is therefore going to have a detrimental impact on improving access to ports.

3.2 It is often the case that policy and politics are heavily passenger-focused. However, this means that the rail freight industry can be overlooked and not given due consideration by policy-makers. The National Policy Statement for National Road and Rail Networks is an opportunity to ensure that there is an appropriate balance between passenger and freight policy.

3.3 Whilst GBRf welcome the development of the Freight Route Utilisation Strategy by Network Rail, the company believes that there is a lack of a long-term asset management strategy for freight routes. For instance, GBRf is a keen supporter of electrification, particularly in relation to the deep sea container market, and is very enthused by the opening of the Nuneaton North Chord. This is a very important element in creating a vital freight corridor from the Port of Felixstowe to the Midlands and the North West. However, GBRf is extremely frustrated that the Government’s plans to electrify parts of the rail network do not include the busy Nuneaton – Felixstowe corridor that would enable electric locomotives to haul containers to the Suffolk port and to capitalise fully on the Nuneaton North Chord. The Policy Statement is an opportunity to bring the treatment of freight assets in line with the policy for passenger routes.

3.4 There are substantial inconsistencies in recent approaches to planning permissions for investment in ports across the UK.4 This has led to calls for an equal approach made by Government to port development. GBRf would recommend that there be clear and unambiguous long term policy guidance from Government on their plans for investment.

4 See the different approaches taken to investment in the ports of Thames Gateway, Felixstowe, Southampton and Liverpool as clear examples of this patchwork approach. Chapter 4: How satisfactory are the current and proposed decision-making structures, including Local Transport Boards?

4.1. Unlike passenger rail, which may benefit from devolution to Passenger Transport Executives, freight requires a single guiding authority at the national level because freight corridors often pass through multiple routes. At the moment, the decision-making is largely within DfT and subject to micro management. This is in contrast to passenger issues where, since the McNulty Review the industry via the Rail Delivery Group and Network Rail, work jointly to arrive at the best value outcome.

4.2 The lack of a central decision-maker has an impact on the way that developments of rail freight corridors are funded. At the moment, the monies for such works tend to be supplied via the Strategic Freight Network fund (SFN). This fund sits within Network Rail, but the DfT provide direction with regards to spending priorities. In order to streamline the decision- making process, the new Freight Director at Network Rail should manage the SFN fund. Part of this role should be to adequately consult with interested parties on spending priorities on the freight network.

4.3 A fully functioning decision-making structure should consult regularly with leading stakeholders. At the moment, for example, the role of Local Enterprise Partnerships (LEPs) has not been utilised to its full advantage. The freight and logistics industries are critical to the ability of businesses to grow and create jobs and there should be greater consultation with LEPs and other leading stakeholders to ensure that thinking is joined up. Chapter 5: To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development?

5.1 Proper investment in road and rail infrastructure is naturally going to positively impact port developments. In the past, it was Government policy to match any private sector investment in the quayside and handling facilities at ports. However, match funding is a successful way of improving access to ports and should be re-adopted as Government policy.

5.2 There should be an integrated strategy targeting gauge clearance of routes and increasing capacity for rail freight (via investment in signalling system) in order to stimulate demand and encourage private sector investment. This should be informed by dialogue with port owners on their asset management/investment plans and dialogue with local authorities on their planning policy for the ports.

5.3 In order to unlock private investment in port infrastructure, investors also require clear decisions from Government on planning permissions as well as clear and unambiguous policy commitments to investing in Britain’s infrastructure.

Chapter 6: Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs?

6.1 The planning approval process for ports tends to focus on development needs in the immediate vicinity of the ports as this is where the jurisdiction of the planning authority lies. As part of the planning process, there should be a wider remit to examine the development needs on the rail corridor serving the port. Often the capacity constraint might lie on the rail network up to 100 miles away from the port itself.

Chapter 7: How realistic are current assumptions about rail's modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight?

7.1 The DfT maintains forecasts for port traffic in the UK and the impact of traffic numbers on inland distribution.

7.2 In general, these forecasts are based on the existing status quo which is one that is heavily weighted towards ports in the South East. Some consideration is given to scenarios with increases in transhipment, but there is little consideration given to scenarios where ports in other areas grow their port traffic. This is despite that fact that ports outside of the South East are seeking to develop their capabilities (including Bristol, Liverpool and Tees). As a result, current assumptions remain focused on the South East despite the fact that developments at other ports could generate a shift in distribution patterns to and around the UK.

7.3 In terms of Network Rail’s investment, too much priority has been given to the intermodal ports to the detriment of the bulk ports. The assumption appears to be that container or intermodal freight will be encouraged off road and onto rail and that bulk commodities have to go on road. The justification for this investment is clearly driven by the environmental objective to reduce lorry movements. As a result, Network Rail is missing the opportunity to encourage a greater volume of bulk commodities onto the rail network.

7.4 For example, the decisions being taken by the Department of Energy and Climate Change on the burning of biomass will have a direct impact on the number of freight trains operating from bulk ports (in particular, the Port of Immingham and the Port of Tyne) as biomass is two thirds the density of coal. No linkage has been made between the decision by the Department of Energy and Climate Change and the need to create capacity and improved access to a number of the key ports that serve the generation market. Chapter 8: Are there any regulatory barriers to investment in ports? What could and should be done about them?

8.1 The regulatory regime for ports must promote competition in order for services to improve and costs to drop. As a rule of thumb, increased competition at ports will also result in an increase in rail freight traffic levels. The industry’s recent growth has in large part come about from an effective open access regime which allows for incumbents and new entrants to enter markets and grow within a stable regulatory structure.

8.2 However, there are currently a number of individual operators who have control of the unloading facilities within a port. For instance, the port of Southampton is an example of where access is currently restricted to a single operator on the basis that the unloading facility has insufficient capacity. This is a clear barrier to growth when there is demand from potential customers that is currently unable to be fulfilled. If the unloading facilities were managed as part of the national rail network then it may well be possible to investigate operational solutions or make a business case for investment to allow multiple operators to use the facilities and satisfy the latent demand. This would therefore remove more lorry movements from the road network.

January 2013

Written Evidence from the Department for Transport (PA 22)

Overview Road and rail access to ports in England and Wales is generally good or at least satisfactory to meet existing distribution needs. Consents have been given for a very substantial increment of port capacity, particularly for a series of deep-sea container terminals and for a second major ro-ro terminal at the Port of Dover. In each case, transport assessments have been considered through the planning system, and transport-related conditions or obligations have been agreed as appropriate.

What should be the priorities for improved access to ports, and why? 1 National priorities for improving access to ports should be:

(a) firstly, schemes already committed in relevant investment programmes; (b) secondly, those improvements to which port developers are themselves contributing — it is important that network providers should play their part promptly once contributions have been definitively agreed; (c) thirdly, schemes showing strong expected benefit/cost performance, for example those relieving pinch-points in the network, subject of course to those budgetary constraints that are inevitable in the wider national economic interest. 2 Regardless of whether access improvements are identified as national priorities they may be prioritised and funded locally by local authorities or Local Transport Bodies using a mix of funding sources including funding devolved from central Government.

3 Also, ports need to ensure they are well prepared to maintain accessibility in the event of disruption due to severe weather or other threats to their resilience.

4 In general, road schemes, whether national or local and including those for which the Welsh Government is responsible, will be assessed on the basis of standard appraisal methodologies including those in the Department's online guidance suite (WebTAG). Particular emphasis should be given to reliability over the logistics chain as a whole.

5 Government’s prioritisation of future investment does recognise the importance of improved access to ports, and improvements to the strategic routes to ports. For example, future improvements delivered through the Highways Agency’s major road programme has prioritised the acceleration of improvements to the A160/A180 near the port of Immingham, and the development of future improvements to the A63 at Castle Street in Hull has been prioritised given its impacts on access to the Port of Hull.

6 Additionally, the Department remains keen to see greater use of coastal shipping where feasible. The Government has pressed the Commission for a loosening of maritime State Aid guidelines to help facilitate this where specific, quantifiable reductions in lorry mileage can be attained. Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where? 7 No, the Department does not believe that this has caused any significant problem for access to ports. No project, that can improve ports access, has been refused or delayed in the planning system because of any lack of clarity about the importance of such connectivity.

8 There is already wide understanding of the need for freight benefits to be accorded due weight in deciding investment priorities, and initiatives such as the strategic rail freight network have been developed without the need for a national networks NPS to facilitate planning processes.

9 The Department is currently undertaking a wide-ranging review of the status and organisational future of the strategic road network. Once this work has concluded, the Department will use the results to prepare a new NPS for national networks.

How satisfactory are the current and proposed decision-making structures, including Local Transport Bodies? 10 The Government is intending to devolve funding for local major transport schemes from 2015. Under the devolved arrangements, funding decisions will be made by 38 Local Transport Bodies. The Department will be responsible for ensuring that local decision making processes are robust, but will not be involved in the setting of local priorities or the selection of individual schemes.

11 The Department shares the Government's wider aspirations to encourage faster and more streamlined decision-making in general, including through the planning system.

12 The Department strongly encourages major ports to produce port master plans, has issued guidance on this, and is gratified by the response of the industry, as many ports have consulted on such plans. Master plans can help Local Transport Bodies and network providers generally to plan for the long term with greater early awareness of commercial ports' strategic business plans, infrastructure projects, and traffic expectations.

To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development? 13 Good inland access is essential to most port developments. There are exceptions for port activities such as offshore wind turbine manufacture, where materials are brought in and leave by sea, and for those liquid bulks which use pipelines for inland transport, but for the majority of traffic, availability of good road, and often rail, links is essential.

14 Fortunately, most ports already enjoy good or at least adequate connections for existing distribution needs, although the Department is aware of some bottlenecks (and is addressing them) — for example, on the A14 — and is not complacent. 15 Rail is essential for certain bulk traffics, notably coal, where the consolidated trainloads tend to be large and reliable and/or the distances are (in UK terms) substantial. The same principle would apply for coal power stations converted to operate from biomass. For entirely new power generation facilities, the likelihood of reliance on imported fuel materials means that location at, or very near, the port facility itself becomes very attractive, thus in turn prospectively reducing the burdens on inland networks.

16 Rail connections are also generally essential for deep-sea container terminals, in order to take a substantial proportion of container movements off busy roads. The appropriate pathing capacity for such rail connections varies depending on local circumstances, and this in turn is likely to influence developer funding needs.

17 Network Rail undertakes a programme of market and demand studies in order to understand the likely pattern of developing demand from the freight sector, including ports. It works closely with its customers, including the ports, to determine the extent to which that demand can be accommodated within existing capacity or may require capacity enhancements. This process informs the prioritisation of Network Rail’s investment in the Strategic Rail Freight Network and its discussions with Government over future funding requirements in the High Level Output Specification.

Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs? 18 The key principle is that port operators are free to develop facilities where they are needed, while at the same time taking account of the costs that their developments would impose on other transport users and on the environment. This underlies the guidance in the National Policy Statement (NPS) for Ports. So, for example, any application for major port expansion would need to be accompanied by a transport assessment; and where that assessment reveals a need, by commitments to mitigate the transport impacts. By the same token, associated development should so far as possible be considered as part of the same development planning process.

19 In this way, the traffic and other external impacts of the development can be internalised so that the costs facing developers reflect, as fully as possible, the society-wide costs.

20 There is specific Departmental guidance on developer funding for inland infrastructure. The approach has broadly been to require that substantial detriment should be avoided.

21 This may be done through mitigation measures such as traffic management to spread peak impacts on critical junctions or paths, or through contributions to improving the infrastructure, such as junction improvements or gauge clearance work on the rail network.

22 Through this policy, an economic 'signal' is conveyed to port developers so as to incentivise them against expanding capacity where the traffic impacts are most costly, but at the same time so that traffic can be accommodated where it is worthwhile to mitigate the external costs that would otherwise arise. How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight? 23 The Department does not publish assumptions about rail's modal share. This is a matter for individual ports, rail freight operators and Network Rail to consider (in some cases, in the context of planning obligations) and they would be best placed to comment on the extent to which planning forecasts and assumptions have been, or are expected to be, fulfilled.

24 In general, rail is most cost effective and most successful in attracting traffic where frequent large consolidated hauls can be carried over a substantial distance. Analysis by MDS Transmodal, under the previous Administration, showed this as an advantage of containers routeing through large ports in the Greater South East that could be set against any reduction in overall inland mileage if they were constrained to tranship through a Continental port and were then brought to the UK on a regional feeder vessel, but on balance did not suggest a justification for policies prescribing either greater concentration or greater dispersion of port capacity location.

25 By the nature of inland waterways in Britain, the scope for them to relieve road congestion is limited by comparison with the Continent of Europe, where inland waterways play a major role. However, there are some local opportunities that should not be disregarded — most notably on the Manchester Ship Canal, which Peel Ports is working to exploit with substantial and ambitious planned developments. As another example, the Thames has been used successfully to help minimize lorry mileage carrying aggregates for building developments, as well as materials and spoil associated with Crossrail, Blackfriars Railway Station redevelopment and proposed for the Thames Tideway Tunnel. It is also expected that water transport will be extensively used in support of the Northern Line extension project.

26 There is also greater scope for coastal shipping. Recovery and growth in port traffic should increase the opportunities for the sort of regular consolidated loads that will make coastal cargo services more viable. In this context, we have made representations about the EU Maritime State Aids guidelines governing freight grants for coastal shipping, as the present rules are at odds with those on State Aid for rail and inland waterway operators.

Are there any regulatory barriers to investment in ports? What could and should be done about them? 27 There are no regulatory barriers in the sense of restrictions limiting those who may invest in ports specifically.

28 Development at ports is subject to planning and environmental constraints, as is development of all forms of infrastructure. Permitted development rights exist up to certain thresholds on port operational land, which helps ports to respond flexibly to changes in the patterns of demand for various commodities. The Government acknowledges that the system can still be complex despite recent reforms, and is committed to making the planning system work more effectively precisely so that it is not a regulatory barrier to investment, provided that potential environmental and congestion disbenefits are avoided, mitigated or where necessary compensated.

29 The National Policy Statement for Ports aims to help applicants and decision makers to ensure that the necessary assessments are undertaken in environmental statements and other application documents. It sets out the issues which applicants need to consider in their assessment, and the requirements which, in broad terms, they must satisfy in order to be confident of success. It stresses that there is a strong presumption in favour of environmentally responsible development.

30 By their nature, many ports are subject to European habitats law. The Major Infrastructure and Environment Unit (MIEU) has been set up within Defra to help guide applicants (and others) through these legal requirements, without prejudice (of course) to consideration and eventual decisions in the planning process.

31 The Department is working with Defra colleagues to ensure that the proposed Marine Conservation Zones (MCZs) take full account of the economic importance of ports, and do not impose unwarranted costs or barriers to worthwhile and environmentally responsible investment. Defra's consultation on the first tranche of MCZs is currently open and those ports affected, and their trade associations, have been strongly encouraged to respond in detail.

January 2013 Letter from Stephen Hammond MP to Louise Ellman MP dated 14 October 2013 (PA 22a)

Thank you for your letter of 27 September, in which you ask several questions about access to ports. I answer these in order, below.

Funding Transport Infrastructure Publication of the Department's guidance on Funding Transport Infrastructure for Strategically Significant Developments followed a period in which there had been an unusually large number of applications for container and ro-ro facilities at ports, plus other major schemes such as Heathrow Terminal 5; and coincided with the global economic downturn. Consequently, as matters have turned out, it has not yet proven necessary to bring the process envisaged in the guidance (including the nomination of a Developer Contributions Co- ordinator) into operation. The Department intends to review the guidelines, as they apply to ports, by April 2014.

A14 funding Hutchison Ports has not been asked to make a financial contribution to the new A14 development. However, the A14 proposal includes tolling and assuming the project proceeds, port users making use of the road would be expected to contribute through the applicable tolls.

Master Plans The Department does not maintain detailed records monitoring the influence of port Master Plans on local infrastructure priorities and it would be difficult to do so. However, awareness of ports' strategic plans and expectations can clearly be helpful to local highway and rail network operators in formulating their own plans and priorities. And it is in the essence of the master-planning process to engage in thorough consultation with network infrastructure providers.

Liverpool RGF and public funding The Regional Growth Fund award for the Liverpool Bay capital dredge was made subject to State Aid compatibility and took into account the Government's priorities to promote growth in the current exceptional economic climate, to address regional regeneration in the North West, and to rebalance the economy.

This was an exceptional case and one that in no way represents a precedent for future container port cases, nor does it mark a change in the Government's general presumption, because of the potential for distortion of competition within the UK, against subsidy to ports in England and Wales.

In a wider setting, we are continuing to press the European Commission to produce robust guidance on State Aids in the ports sector that properly acknowledges the commercial nature of most ports infrastructure (including capital dredging), as well as superstructure.

I hope this is helpful.

October 2013 Written Evidence from Freight on Rail ( PA 23)

Freight on Rail, a partnership of the rail freight industry, the transport trade unions and Campaign for Better Transport, works to promote the economic, social and environmental benefits of rail freight to local and central Government.

2. What should be the priorities for improved access to ports and why As the Eddington report stated, ports, which are our international gateways, are vital for the economy so good surface access links are crucial. Ports are gateways to the freight network so improved rail freight access is key for the economy as Britain relies on rail freight to play its role in the intermodal freight solution. Between two thirds to three quarters of rail freight is port related.

As well as the traditional bulk markets, rail has an expanding role in consumer rail freight in relation to ports. Consumer rail freight increased by 11% in the past year. It grew 29% in the past 5 years, despite the recession, its ninth consecutive year of growth & gained market share. The industry predicts that rail freight overall will have doubled by 2030 with intermodal traffic growing fourfold or even fivefold which demonstrates the need to plan for further port related rail upgrades.

The Ports industry sees rail as a vital mode and wants more rail capacity. Rail upgrades need to be planned ahead of port expansion to build robust integrated multi-modal supply chains.

2.1 HLOS Strategic Rail Freight Network schemes should be completed asap The Government’s recognition of the importance of continuing to upgrade the Strategic Rail Freight Network, in its July 2012 HLOS statements, welcomed by the industry, has an important role in stimulating the economy. The committed rail enhancements to the ports in the Government’s Strategic Rail Freight Network Vision (for the next Network Rail period 2014-2019) should therefore be prioritised for delivery as soon as possible to provide a fast reliable sustainable alternative to road distribution which reduces road congestion at the ports and along the key distribution corridors. Currently there is suppressed demand for consumer rail out of Felixstowe and Southampton in particular so these planned enhancements, (see list below of Network Rail period 5 schemes 2.3), are crucial to enable the rail freight operators to offer enhanced services.

2.2 Targeted interventions work Since the gauge upgrade out of Southampton port was completed in February 2011, rail’s market share has increased from 29-36% relieving long distance road congestion on the A34.

2.3 HLOS rail freight commitments Network Rail Period 5 schemes Phase 2 of capacity upgrades on Felixstowe-Nuneaton route Southampton to West Coast Mainline capacity enhancements

£200m for the Strategic (Rail) Freight Network (SFN) Additionally, the following projects are the main schemes which will benefit freight and passenger services:- ii) Reconstruction of Ely North Junction iii) Leicester area capacity iv) Electric Spin – Southampton Port to Basingstoke, Basingstoke – Reading- Oxford –Banbury – Leamington Spa – Coventry v) Capacity upgrades to the West and East Coast Mainline vi) Great Western electrification

2.4 A14 corridor example of what the planned HLOS enhancements will deliver The planned capacity upgrades during the period 2014-2019 along the A14 corridor route which will result in an increase from 29 to 58 daily trains operating in and out of Felixstowe (with rail’s market share increasing from around 25% to around 40%) resulting in the removal of 40 million long distance lorry miles from the A14 corridor per annum.

The Ipswich Chord, due to open in March 2014, will allow freight trains to by-pass Ipswich station and go cross country towards the West Coast Mainline which will save two hours out the round trip thus boosting rail’s reliability, productivity and competitiveness.

2.5 Next steps needed for improving rail’s access to the ports Further unplanned upgrades, such as further capacity and electrification, including infill schemes would enable the rail freight operators to continue offering enhanced services and increased productivity. Examples of enhancements needed are as follows:- i Electric spine route from Southampton In order to be able to maximize the benefits of the electric spine, announced by the Government in July as part of HLOS, more capacity will be needed on the Oxford corridor including a flyover at Basingstoke. ii Next stage on Felixstowe to Nuneaton route Electrification The next measures to improve congestion on the A14 corridor is rail electrification which would bring added economic, environmental and social benefits through extra capacity from longer trains and better utilisation of train paths because of faster acceleration of electric locomotives. iiiThere will be long term capacity issues on ECML and WCML until HS2 phase 1 and phase 2 are built.

So these as yet unplanned enhancements will be vital to sustaining freight growth out of Southampton, Felixstowe and London Gateway.

Why rail freight is important to port related economics?

Freight needs to be examined holistically The customer wants the best solutions freight available so freight distribution needs to be examined in a multi modal way; so that the different modes can play to their strengths and complement each other. For example 30% of long distance deep sea freight coming into container ports in the SE is transported by rail for its onward inland journey; the congestion relief advantages both at the ports and long distance are cross modal as it makes all the modes more reliable and robust. The customer wants a good reliable consistent services at market prices.

Rail freight is safer than long-distance road freight using major roads, as HGVs are over 3 times more likely to be involved in fatal accidents than cars on major roads due to a combination of size, lack of proper enforcement of drivers hours, vehicle overloading and differing foreign operating standards. Source: Source: Traffic statistics table 2010 TRA0104, Accident statistics Table RAS 30017, both DfT

Rail freight which has a much better environmental record than road UK rail freight produces 70% less Carbon dioxide emissions than the equivalent road journey

Congestion benefits of rail freight Road congestion is now costing around £24 billion per annum according to the Freight Transport Association based on Government figures; the heaviest freight train can remove a 160 long distance HGVs from our roads – Source Network Rail June 2010 Value of Freight.

Economic benefits It is currently estimated that rail freight contributes £870 million to the nation’s economy. Data from the Office of National Statistics suggest that the rail freight industry is supporting an economic output of six times its direct turnover. A further measure of the industry’s contribution is its added value which is estimated to contribute £299 million in profits and wages. Source Network Rail Value of Freight July 2010

Energy efficiency of rail A gallon of diesel will carry a tonne of freight 246 miles by rail as opposed to 88 miles Network Rail July 2010

3. Is the delay in producing a National Policy Statement for National Road and Rail networks creating problems for improving access to ports? If so, in what ways and where? Government has not written the Policy Statements its own Act requires. The 2008 Planning Act commits Government to a National Policy Statement on National Networks, which is key to giving strategic rail freight interchanges statutory weight in the planning system. The Ports NPS was issued last year.

This document has been held up due to Localism, the National Planning Policy Framework, HS2, Airports policy and presently the promised consultation on roads strategy. This, or a formal policy statement on interchanges, is a vital document for investor confidence, and must be produced.

The delay in producing this NPS is putting a serious brake on considerable port related regeneration opportunities because of the lack of planning permission for strategic rail freight interchanges and therefore the creation of thousands of jobsi. The announcement of the DfT Strategic Rail Freight Interchange policy in November 2011, as part of the Logistics Growth Review, was welcome as it stated that a network of freight interchanges are needed near the business markets, to link key supply chain routes, with good rail and road connections to facilitate trade links between UK regions and the European Union. However, this policy now either needs to be incorporated in the NPS which has statutory status or given statutory status in its own right, in the land use planning process. The private sector, including institutional investors, wants to invest in these facilities as part of the ongoing investment in multi modal distribution infrastructure but the lack of the NPS is creating uncertainty. In principle, the Coalition Government says it supports the development of such facilities but in practice, Government inaction and barriers in the planning system is holding up a number of these developments resulting in lost employment and investment opportunities. Road rail transfer facilities are needed in the right locations with good road and rail access on the Strategic Rail Freight Network.

The announcement of planning permission for the Radlett rail freight interchange is welcome and is a step in the right direction. In principle, the Coalition Government says it supports the development of such facilities but in practice, Government inaction over the publication of the National Networks National Policy Statement and red tape is holding up a number of these developments resulting in lost employment and investment opportunities. Barriers standing in the way of development Even under the new Planning Act regime, schemes are frustrated by unjustifiable bureaucracy. The application for DIRFT III was rejected in December as an incomplete application, reportedly over minor problems with the assessment of off-site roadworks, lines missing from a map, and a failure to consult one local authority on the other side of the country. No doubt these issues will be swiftly resolved, but with pre application costing several million pounds to complete, this red tape must be reviewed and treated in a pragmatic fashion if the Government is serious about promoting investment and infrastructure development.

4. How satisfactory are the current and proposed decision-making structures, including Local Transport Boards? As the Heseltine report on fostering economic growth in the regions stated stronger regional structures are needed to promote economic growth, particularly outside London and the SE. Strategic transport planning needs to be sub-regional and the Heseltine report recommended elevating LEPS and stated the need for regional structures.

LEPS need to take into account the wider national and sub-national benefits of rail freight beyond local authorities and LEPs areas of responsibility. In some cases, even though there are clear economic benefits including job creation of a interchange development, there can be local opposition because of extra local HGV traffic. However, there are clear sub-national economic benefits of long distance road congestion reduction and road accidents and pollution reduction which should be recognised by local authorities, LEPs and Local Transport Boards.

Freight on Rail would like to see investigation into the effectiveness of LEPS with regard to wider strategic transport and spatial planning at a sub-national level. Freight transport in particular tends not to be confined to local authority or LEP boundaries. Especially, in the case of rail freight, as the majority of flows are longer distance and typically transit three regions.

Because of the nature and scale of LEPs, it is important that the new Local Transport Bodies such as Local Transport Boards are able to take a wider strategic view of transport planning and work together to plan strategic transport projects. This starts with defining and safeguarding suitable sites for terminals and alignments in local plans. Then working with a local authorities and the rail freight industry to plan and fund transport projects.

Earlier this year, the Department for Transport consulted on options for devolving decisions on, and funding for, sub-national major transport schemes to new Local Transport Bodies. The consultation document envisaged a significant role for Local Enterprise Partnerships in the new LTBs. The proposed new way of deciding sub-national major transport schemes is a new departure for the Department and for transport planning in this country which have accountability and transparency implications. Local Authorities are publicly accountable bodies unlike Local Enterprise Partnerships which do not have statutory status. If the planned changes to Local Transport bodies give LEPs, which are private sector, more power they will need to be reformed and made more accountable. The performance of LEPs remains variable with patchy performance to date and variable engagement with transport. Norfolk and Suffolk LEPs have shown detailed commitment to Felixstowe and to rail freight

Local transport boards, which are as yet untested are to have an important role as they will received devolved funding in 2015. Despite the fact they are still in the process of being agreed, they are being asked by the DfT to submit their priority list of schemes in July 2013. Apparently, three separate LTBs are planned in the West Midlands where it may be difficult to get consensus on inland port distribution and upgrades..

5. How realistic are current assumptions about rail’s modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight?

Previous rail freight forecasts made in 2006 for the period to 2010 have already been exceeded which adds credibility to the following industry forecasts.

• MDS forecasts rail tonne-km doubling 2010-2030 with Intermodal quadrupling and infact with investment intermodal could grow five fold

• Actual tonne kms figures for the years 2009-2011 higher than previously forecasted

Rail freight has been a success story, especially in port related activity so that given the existing market conditions and planning permission for more interchanges this growth should continue. Rail offers an alternative to road to overcome ongoing road congestion problems; fuel price increases make rail more competitive and the need to reduce emissions remains.

• Rail freight overall grew 60% in past 10 years. Consumer rail freight has increased for the eighth consecutive year.

• Latest ORR figures for the year 2011/12 show total tonne kms up 10% and intermodal freight up 11% on previous year

January 2013

Written evidence from Tendring District Council (PA 24)

I am writing to endorse the submission of the Haven Gateway Partnership (attached at Appendix One) and dated 21st January 2013 in response to the Transport Select Committee’s Inquiry into Access to Ports. Tendring District Council is an active member of the Haven Gateway Partnership and as such contributed to the preparation of the Partnership’s response.

The Council has for some time expressed its concern about the status of the A120 and its critical importance to the on-going success of the Haven Ports. The A120 is also a vital artery serving the district’s fragile economy.

The Council would welcome the opportunity to attend the Transport Select Committee’s Inquiry should this assist the Committee in establishing its conclusions.

January 2013

Written evidence from DP World London Gateway (PA 25)

Summary

1. DP World London Gateway welcomes the Commons Transport Committee's inquiry into access to ports; as an island nation, access to maritime infrastructure is integral to the development of the UK economy. This memorandum supports the government's commitment to diversify the UK economy and its promotion of economic growth. The sea port is a single-node in the supply chain. Unless the port is appropriately connected to the point of consumption or origin (hinterland), then it will fail to realise its full economic benefit for the country. As international trade grows, it is vital that the landside access to the seaports is developed so that the logistic cost remains internationally competitive for the UK's importers and exporters. 2. In an increasingly globalised and competitive world, to protect/increase UK employment, and for the UK economy to remain competitive, we believe that the government should implement the necessary framework to attract foreign direct investment making the UK a desirable place to do business and to invest in. Transport infrastructure is critical to the movement of goods and people facilitating both domestic and international trade. Any assistance to the private sector on improving access to ports is to be welcomed, leading to enhanced access and connectivity, greater efficiencies, greater flexibility, more trade, more jobs - a better UK economy.

Introduction

3. DP World London Gateway is a world class port centric deep sea container port, a £1.5 billion foreign direct investment in the UK economy and will open in quarter four of 2013. Due to its location and purpose-built infrastructure designed to service the largest vessels in the world today, it is considered a "game changer" for the UK supply chain. The project will create 36,000 thousand jobs, GVA of £3.2 billion per annum (Oxford Economics 2009) and be home to one of Europe's largest logistics parks. London Gateway's proximity to the heartland of the UK will significantly reduce costs to the UK supply chain, lower road mileage and therefore reduce carbon emissions. London Gateway will also meet the needs of the ultra large container vessels (ULCVs) and increase supply of ULCV berth capacity in the UK where there is currently a shortage.

Industry Background

4. Structural change is taking place in both the global container shipping and container port industries. Container vessels are increasing in size with the emergence of ULCVs, ranging from 10,000 to 18,000 TEU primarily to benefit from economies of scale, and result in significant cost savings. Such vessels will only call at certain ports: example call criteria include proximity to established trade lanes (such as the 'north Europe triangle'), physical constraints such as draft and tidal window limitations, terminal quay length, crane type, yard equipment/availability and terminal ability to handle larger container exchange sizes (i.e. more containers per vessel call). Cascading is increasing vessel sizes on trade lanes beyond the Asia-Europe trade lane, such as the north-south trades. This again puts additional strain on those terminals which have not evolved over this time period and are geared to handling smaller vessels.

5. The UK has a lack of deep-sea berths capable of handling the next generation of ULCVs. London Gateway solves this problem, when fully developed it will be able to handle six ULCVs simultaneously.

6. Without the additional UK berth capacity to handle these ULCVs, the larger vessels are likely to call only at mainland Europe (e.g. Rotterdam) with goods being transhipped via connecting feeder services to the UK (and vice versa). This additional transport leg would increase the UK's dependence on mainland Europe and the cost of UK inbound or outbound cargo. London Gateway's deep-sea port will give shipping lines and the UK supply chain more choice, flexibility and help the UK economy to be more competitive. However, despite the willingness of private enterprise to invest in the provision of such world-class maritime infrastructure, for the reasons stated in paragraph 1 above, the full benefit to the UK economy is dependent on appropriate hinterland access being in place to support the entire supply chain.

Commons Transport Committee Questions

a. What should be the priorities for improved access to ports, and why? A statement from the government outlining its support for the UK port sector would be welcomed along with concrete action to:

Prioritise and promote world-class inter-modal connectivity within the UK next to key international gateways as recommended in The Eddington Transport Study (2006).

Prioritise and promote access to trade, the free movement of goods, reduction in lead times and continue to work with global trading blocks to remove barriers to trade, reduce the time taken to process trade in transit (customs/bureaucracy) and ensure cargo flows are timely, sustainable, flexible and non-disruptive. For UKTI to prioritise and promote UK trade connectivity globally, making it known that `UK PLC' is open for business. b. Is the delay in producing a National Policy Statement for National Road and Rail Networks creating problems for improving access to ports? If so, in what ways and where? Production of a National Policy Statement for National Networks is very important to developers as it provides more certainty when they are considering a major infrastructure investment. Ports are one part of the international transport chain and it is vital that developments can take an informed view of total government strategy into which their development may fit. A national policy should look at the needs of the entire transport infrastructure pipeline, as supported by The Eddington Transport Study's recommendation that 'Transport corridors are the arteries of domestic and international trade, boosting the competitiveness of the UK economy' (2006). c. How satisfactory are the current and proposed decision-making structures, including Local Transport Boards? Previous regional structures did play an important part in assisting with port infrastructure developments e.g. SEEDA with rail gauge clearance for Southampton and Advantage West Midlands with re-gauging the lines to inland terminals in their area. There is no evidence, so far, that the Local Transport Boards made any impact on rail improvements or are considering doing so. However we welcome continued effort from central, regional and local government to go beyond what is satisfactory and deliver a world class service for Britain to be competitive. d. To what extent can investment in road and rail infrastructure influence the market and regional decision-making on port development? Investment in infrastructure is vital to port development. A port is only one part of the the country in a swift and efficient way. It is the government's role to establish a strategy around which developers can decide on the optimum locations for port developments to assist the country in providing the most economic supply chain. Despite investment in road or rail, the right geographic location is a critical success factor for any successful port. Proximity to major consumer, population hinterlands, origin & destination distribution hubs, ability to serve the ULCVs and proximity to the established trade lanes are all important factors. If a port is in the wrong location/geography, its business model will structurally struggle to work and benefits to the economy will not be optimised or fully realised as a result. e. Are decisions on port development taking sufficient account of the traffic generated by ports and associated development needs? When close to the point of primary consumption; port centric developments and the multi-modal distribution of container cargo flows have the potential to create a significant uplift in traffic efficiency and actually reduce pressure on national transport infrastructure. Port centric and multi-modal projects such as London Gateway are well positioned to manage/optimise traffic levels especially with the implementation of an efficient vehicle booking system. Within the UK rail and coastal feeder services will also have an important part to play in reducing traffic, London Gateway intends to facilitate 33% of containers by rail inland and encourage coastal feeder services. This approach combined with the port and logistic park's proximity to major UK population, economic and distribution hinterlands provides greater supply chain flexibility, efficiency and savings. f. How realistic are current assumptions about rail's modal share of ports traffic? Under what circumstances could rail freight or inland shipping play a greater role in reducing port-related road freight? Current assumptions of the rail market share at London Gateway (33%) are based on existing similar traffic distribution from other existing ports and must, therefore be considered to be realistic. The rail share of traffic has influenced the whole design of London Gateway. Enough space has been allowed for two dedicated rail terminals within the port, a common user rail facility and the rail access has been upgraded to twin tracks so that the projected throughputs can be accommodated.

Regarding 'inland shipping', the UK coastline is a viable water way and as stated in section 'e' will have an important role to play in the distribution of UK container cargo. London Gateway as a hub location has the warehousing potential to create new critical mass to support coastal lifts. When combined with a port-centric multi-modal approach, we believe port-related road freight can be managed accordingly. g. Are there any regulatory barriers to investment in ports? What could and should be done about them? Investment in port infrastructure in the UK requires significant capital expenditure, the navigation and agreement of numerous stakeholders and a detailed understanding of UK planning policy. Where possible the government should continue to streamline UK planning policy and remove any barrier that deters inward investment.

January 2013