Rail freight forecasts published & Virgin West Coast Main Line contract extended

Rail freight forecasts published Rail freight forecasts, published yesterday by MDS Transmodal on behalf of the Rail Freight Group (RFG), show ‘strong’ prospects for growth in the industry. Increasing demands on the rail network mean that volumes of rail freight are expected to double by 2030, with a predicted year-on-year growth of 3.3%. Freight volumes grew by 2% between 2006-2011 and intermodal rail freight grew by 29%, exceeding previous forecasts. RFG Chairman Tony Berkeley said: “These updated forecasts demonstrate the strong potential for rail freight growth between the major conurbations in the UK. “Helping the freight operators to run longer trains, each day of the week, will allow them to make the most efficient use of existing paths, but cannot alone address the need for additional network capacity. “Further investment in the Strategic Freight Network, and support for the development of new terminals must be prioritised by Government to support this doubling of rail freight.” The forecast also looked at productivity improvements in rail freight, in particular the impact of both longer trains and a move from a five day to a six day a week operation for intermodal trains. If implemented, such measures would reduce the number of additional paths needed on the network, and, as they would tend to reduce rail costs, would also generate additional modal shift. Virgin West Coast Main Line contract extended Virgin Rail Group (VRG) will operate services on the West Coast Main Line until December 2012, after the Government extended the franchise contract. rnThe previous expiry date was March 31, leaving a nine-month gap between the end of one franchise, and the start of the next one – prompting speculation that Directly Operated Railways, which runs East Coast, would have to step in if terms could not be agreed between Virgin and the DfT for the extension. rnA deal has now been struck though, and when this contract expires, a longer franchise will run until March 2026, with an option to be extended by up to 20 months. VRG, a joint venture between Stagecoach and Virgin Group, has already pre-qualified to bid for the new Intercity West Coast rail franchise. rnUnder its current contract, Virgin Trains is set to add three new trains, and lengthen 31 from 9 to 11 carriages, providing an extra 28,000 extra seats for passengers. rnThe deal covers any shortfall on DfT revenue targets through an 80% revenue support agreement or any excess through an 80% revenue share, and VRG will make a premium payment to the Government for the duration of the extension. rnRail Minister Theresa Villiers said: “The West Coast Main Line is one of our busiest and most important rail arteries. Keeping the existing operator in place while these new trains and carriages are introduced should help ensure they are introduced smoothly onto the network so passengers reap the benefits as soon as possible.” rnVirgin Rail Group CEO Tony Collins said: “We are delighted to have agreed an extension to the current West Coast franchise. It is great news for passengers and will also deliver value for money to taxpayers. “The extension will bring continuity and allow us to run services for passengers at an exciting and challenging time for the country with the London 2012 Olympic Games next year. We will also be working hard to introduce important extra capacity on the West Coast Main Line.”