Friday, November 29, 2013

Transport and Logistics Research Day Success as Eurotunnel Awaits RoRo Ferry and Track Decisions

New Technology Lengthens Life of Rail Infrastructure Whilst Decision on Cross Channel Service Hangs in the Balance
Shipping News Feature

UK – FRANCE – EUROPE – This is a particularly interesting time for Eurotunnel which has just held an ‘Innovation Day’ to demonstrate new technological advances designed to lower maintenance costs and improve safety. Meanwhile the company holds its collective breath as the decision of the UK’s Competition Arbitration Tribunal decides the fate of its RoRo cross channel ferry service which rose from the ashes of the SeaFrance debacle.

Most rail companies find the need to change rails completely every twenty to thirty years or so, when the total tonnage carried equates to 800 million tonnes, but the intensive use by Eurotunnel, which operates the most heavily worked railway infrastructure in the world with up to 400 trains per day, means that for the cross channel link, independent of the criteria specific to high speed rail, that equates to an average of once every eight years, and in parts as often as every five.

On November 28, i-Trans, the innovative research and development centre for sustainable transport and logistics selected the Eurotunnel terminal in France to demonstrate three major new innovations, supported by 14 companies, as a showcase for the French railway industry by presenting the Track Train System Availability (TTSA) project. TTSA aims to optimise the lifetime of railway infrastructure through more efficient preventive maintenance planning, thereby increasing the availability of railway infrastructure.

The day was declared a success, demonstrating that the intensive research and development into metallurgy, new high performance welding techniques and the results of trials within the Tunnel meant that in future rails could be changed after carrying 1.3 billion tonnes, giving a significant gain in terms of costs and adding considerable extra life to the rail track.

Maintenance of the track is an overriding priority for Eurotunnel, safety is the group’s prime target for several reasons. Firstly it is simply cheaper in the long run to keep maintenance levels up as any interference with service costs money in the short term and the consequent unreliability affects the long term view of customers who can search for alternatives. This client motivation would be multiplied should (and a perceptible shudder passes through at the thought) there ever be a serious rail accident within the confines of the tunnel itself. Insurance and associated costs would rocket whilst traffic numbers would likely plummet and, as John Keefe, Eurotunnel spokesman put it when speaking to us, ‘safety is what gets us out of bed in the morning’.

The Innovation Day must have proved a useful distraction for some of the Tunnel company’s staff as they await the verdict next Wednesday (December 4) of the UK’s Competition Appeals Tribunal which will announce its decision on the earlier ruling of the Competition Commission that Eurotunnel must close down its MyFerryLink operation, the RoRo ferry deal which saw it snap up old SeaFrance equipment  from a rival DFDS/LD consortium with the sanction of the French government, and which engendered a referral from the Office of Fair Trading. 

Eurotunnel maintains that by operating in both spheres of cross channel trade, under and on the sea, it has widened competition whilst its opponents say it has reduced it. Should the Tribunal decide that the Competition Commission was wrong then MyFerryLink can continue to operate, whilst should the decision be upheld, then the service will be forced to close. Here however is where things start to get a little more complicated.

The Tribunal may decide that the Competition Commission’s decision was arrived at after an abuse of procedure in that at the original hearing there was an amount of evidence which was redacted, yet it seems this may have influenced the judgement. As these details, whatever they are, were withheld from Eurotunnel, this may amount to an abuse of due process with a claim that full disclosure should have been made, as in a Court of Law. There seems to be precedence, as last month Ryan Air successfully appealed on comparable grounds to the Tribunal which then forced the Commission to reveal similarly redacted evidence to the airline which had been instructed to sell off part of its operation to Aer Lingus.

Should Eurotunnel be ordered to close MyFerryLink this will surely lead to an intergovernmental row between Britain and France as the deal to buy SeaFrance assets contained a clause insisted on by the French authorities locking in Eurotunnel for five years, during which time it is not allowed to dispose of the vessels.

In addition to all of this the spectre of an even longer argument, which we last wrote of in September and this time involves the European Commission, continues to haunt Eurotunnel, although to be fair they might even derive some pleasure from watching the two countries authorities squaring up to Europe. The EC had queried the amounts charged for track access and demanded the rates be reduced, while the French and UK governments insist that the rates are carved in stone, having been part of the Treaty of Canterbury.

Eurotunnel point out that, should the European authorities get their way, the effect will be diametrically opposed to their declared intent to expand the continents rail infrastructure using private investment as a primary source. To see a legal contract, signed years ago with the acceptance of both private interests and two governments, publicly torn up with the consequential loss of revenue to those who put the money up, Eurotunnel says would be beyond the pale.

We probably have to wait a very long time for this particular chess game to finish as both the French and the British have politely told the European Commission that there is nothing to renegotiate and have put up what was diplomatically described as a ‘robust defence’.

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