No free rail rides, hauliers warned

THERE will be no free rides for freight on the rail system after privatisation, the Transport Secretary, John MacGregor, warned a group of freight hauliers yesterday.

Mr MacGregor, speaking to a conference organised by Freight on Rail, accepted that some freight had been lost to rail recently because British Rail had been imposing large price rises.

But he said that these contracts 'were not even covering their marginal costs, let alone making any kind of contribution to the common costs of infrastructure'.

There was no evidence that BR had been turning away viable traffic, he said.

Railfreight Distribution, BR's non-bulk freight arm, currently pays pounds 40m a year for track charges, but since losses are expected to top pounds 90m this year, the charge is in effect notional. Ian Brown, the managing director, warned the Commons Transport Committee last week that any attempt to increase the amount it has to pay would result in loss of business to road.

Mr MacGregor, however, promised: 'No one will be priced off the railways, providing they can cover the real costs of using the track for the services they wish to run.' The Government is expected to publish its proposals on track charges after privatisation 'in due course'.

The Government's policy has long been to privatise BR's freight operations, but its unprofitability has made it unattractive to the private sector. Mr MacGregor said that the privatisation legislation, expected to be published tomorrow, would allow the Government to create new freight companies that could be privatised. This implies that some profitable sectors may be hived off to the private sector relatively quickly.

The Government's plans received a shot in the arm with the announcement that a new private rail company, Mendip Rail, was being created by the two quarry companies, ARC and Foster Yeoman, which are the only operators of private locomotives on the rail network.

The company, to be headed by Robin Gisby, formerly of Charterail, the road-rail haulier that collapsed last year because BR's track charges were too high, will consolidate the operation of the two companies' nine freight locomotives and 600 freight wagons. It is hoped that this will create spare capacity that will then be offered to other freight hauliers.