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An example of the treacle surrounding Open Access Freight Operators: <H1>INFORMED SOURCES June 2003 </H1> <H2>Freight wars test the Regulator </H2> New boys on the freight-block GB Railfreight and Freightliner Heavy Haul are causing regulatory headaches Railtrack's decision to bootstrap competition to EWS in the in the provision of its infrastructure works trains has been taken up enthusiastically by heavy haul rail customers who also wanted better quality of service. And since works trains don't run 24/7 EWS now has serious competition. Freightliner Heavy Haul(FHH) started operations under the existing Track Access Agreement (TAA) between Railtrack, now Network Rail, and Freightliner signed in March 2001. But following the acquisition of its own operating licence FHH is now seeking its own TAA . As proposed, these access rights would cover the continuation of existing services, which FHH has been running on a spot bid basis. Some new rights are also being sought. Despite much hype by the Office of the Rail Regulator, a model track access contract is not yet available. So FHH is using the Direct Rail Services access agreement, signed in January this year, as a template. In turn, the DRS agreement was based on that signed by EWS in May 2002.  Not easy But it's not as easy as that. FHH's new five year TAA is due to start on June 14 2003 . But most of Freightliner Limited's existing rights which FHH intends to take over, expired on May 17 and the Regulator had to approve a supplemental agreement extending these rights to June 13. . Also seeking its own TAA is GB Railfreight. This is taking even longer because of a dispute over compensation for disruption caused by work on Phase 2 of the Channel Tunnel Rail Link. GB Railfreight claims that Network Rail is unwilling to offer compensation for CTRL-associated disruption from possession overruns, adjacent network disruption or landslips. Since its services are ‘very likely' to be directly affected by Phase 2 works, GB and its customers risk being exposed to potentially severe disruption without any compensation. Why the fuss? Well, CTRL protection is available to GB's competitors, creating an unlevel playing field. So, with its TAA otherwise tickety boo, GB is making a Section 17 Application to the Regulator seeking equal rights on CTRL compensation. Why, you may be wondering, is Ford subjecting us to this regulatory wonkery? Well, the rail; freight industry is in a very interesting stage of development at the moment and access is a key issue. As Scottish coal demonstrates. <H3>Coal paths </H3> During its short life FHH has gone from nowhere to a claimed 25% of the UK coal-by-rail market in under four years at EWS' expense and is looking to keep on growing. Exhibit ‘A' in this success story is the handling of flows between Scotland and Yorkshire power stations. Volume in this market is sensibly constant, since it is determined by the power stations' contracts. However the traffic originates from a large number of supply points: flow change weekly. Some of the FHH business comes from new flows but much of it, naturally, will be traffic won from EWS. Thus RHH will need to use the same paths on the Glasgow and South Western route But, according to informed sources, EWS is hanging onto what it sees as its paths – not surprisingly, you might think. There is a ‘use-it-or-lose-it' provision in the TAA, but this is quite easily circumvented by juggling train movements so that all paths are used often enough not to be lost. RFHH reckon that there are eager potential customers needing to shift enough coal to fill 17-22 trains a week, but because of path constrains the company can handle only 10-15. In one week earlier this year RFHH had to turn away £70,000 of coal business because it didn't have the paths. <H3>Hardball </H3> EWS is playing this competitive game with some skill. And before we go ‘aah' over the brave little newcomers being trampled on by the Maroon Machine we are talking about a competitive business where there is no duty to make things easy for your competitors. Indeed, EWS has said that RFHH can of course use Anglo-Scots paths it does not does not need and that these will be available on a weekly basis. Trouble is that the planning of train movements in the coal spot market starts a week in advance. Assume RFHH takes on a new flow and agrees the services with the customer. By the time EWS has finished its train plan and released the spare paths it is too late for FHH to juggle its traction and rolling stock fleet to carry the traffic. Result – an unhappy customer. But surely, the wonderful contractual structure of the industry, largely devised by our Great Regulator, should cut through such knotty problems. Er, unfortunately not. As stated the EWS TAA is ambiguous and thus open to interpretation, even though it was written by the Regulator under a Section 17 application. It seems it was not one of Tom Winsor's better efforts. The use-it-or-lose-it' provision has certainly proved inadequate and attempts to find out how it was intended to work in the case of coal path wars have drawn a blank.   <H3>Blunt object </H3> Eventually ORR will have to make a decision on the TAA interpretation, since the RFHH Section 18 TAA is out to consultation. But that will take time. So, to speed things up, Network Rail has offered EWS only 50% of its previous number of paths on Glasgow-South Western route in the Winter 2003 timetable. The other 50% will be available for any operator to bid for on a weekly spot basis. This cunning plan is aimed at generating a protest from EWS which should go to the Timetable Disputes Resolution Committee. If Network Rail loses the decision it will appeal to the Regulator, thus obtaining a definitive decision on the issue. As we went to press EWS confirmed that it was in discussions with ORR and Network Rail over the issue. Of course, another reason for this item was to remind you how labyrinthine the industry has become. And remember, all this treacle costs money and earns no revenue. Source: <A href="http://www.alycidon.com/ALYCIDON%20RAIL/INFORMED%20SOURCES%20ARCHIVE/INF%20SRCS%202003/Informed%20Sources%2006%202003%20p3.htm">http://www.alycidon.com/ALYCIDON%20RAIL/INFORMED%20SOURCES%20ARCHIVE/INF%20SRCS%202003/Informed%20Sources%2006%202003%20p3.htm</A>
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