Dáil debates

Wednesday, 7 March 2007

 

Rail Freight: Motion (Resumed)

7:00 pm

Photo of John EllisJohn Ellis (Sligo-Leitrim, Fianna Fail)

The strategic rail review commissioned by the Department of Transport contained a comprehensive examination of the rail freight business and its realistic potential to support economic development and contribute to sustainable development.

Iarnród Éireann, in responding to the challenges contained in the review, developed a business plan with regard to freight and continues to pursue a policy of growing its rail freight business where opportunities present, such as in bulk and trainload traffic. The company has also sought to return the rail freight business to profitability. To help achieve this turnaround, Iarnród Éireann withdrew from loss-making groupage, palletised and single container rail transport. This has resulted in the deficit on rail freight being reduced by 50% in the past three years. All Members are aware that rail freight had been a major burden on Iarnród Éireann and had been affecting its profitability seriously in recent years.

Since 1999, Iarnród Éireann has invested more than €1.6 billion in rebuilding the railways with Government and EU support for the investment programme. This has delivered improvements in new trains, upgraded infrastructure and customer facilities. Only yesterday, the first shipment of the new trains that will serve the Dublin to Sligo line was unveiled in Dublin Port. This commitment to the rail service is a far cry from the days when I listened in this Chamber to Members discussing the closure of the entire rail network in the west. It has now been upgraded to the point where welded line extends all the way from Dublin to Sligo. In turn, this means that the new trains, which can travel at 90 mph, can be put on those lines to provide people along the route with the train facilities to which they are entitled. While such investment is primarily focused on improving passenger services, the investment in improving rail infrastructure also has a direct beneficial impact on freight activities.

Iarnród Éireann has no plans to eliminate capacity or freight infrastructure. The company has made progress in growing the rail freight business in areas in which it holds a competitive advantage over road haulage, such as large volumes or trainloads over long distances. For example, Iarnród Éireann has re-introduced the trainload pulpwood business by modifying surplus wagons and providing additional services for Coillte between the west and the south east. The company has also altered rail schedules and provides three additional trains per week for Tara Mines with a potential to carry an extra 85,000 tonnes of lead and zinc between Navan and Dublin Port per annum. It has also modified surplus platform wagons to provide a trainload service for containers between Ballina and Waterford Port.

All Members are aware that the only types of freight that can be carried effectively by rail are heavy freight or trainload freight. Apart from those Members who are thinking in extremely radical terms, no one considers it viable to load a container at a company's premises, take it to the train station, unload it and put it on a train, take it to Dublin or wherever its destination and reload it. Rail freight is only possible when one has a full train being taken up with whatever is being carried. Moreover, Members are aware of the introduction of regulations to open the freight market, through EU Directive 2004/51, to competition from both domestic and foreign operators, from 1 January 2006 in the case of international freight and from 1 January 2007 in the case of domestic freight operations.

I support Iarnród Éireann's extensive engagement with industry and transporters throughout Ireland to try to identify long-term sustainable business opportunities. However, these are quite scarce. The company has genuine difficulty in identifying business opportunities that offer reasonable volumes of business on a regular basis. It is not feasible to run trains with one or two containers and Iarnród Éireann has not identified sufficient business, with the exception of the timber trains from Ballina to Waterford, to group together a number of separate activities to form a viable trainload.

Most Irish industry is focused on "just in time" transport and as our road network continues to expand and improve, the role of rail freight becomes more problematic because all rail journeys involve road movements at each end of the logistics chain. Furthermore, distances in Ireland are short. All research that has been carried out demonstrates that for rail transport to be viable, the minimum distance travelled should be from 400 to 600 miles. This can be seen on mainland Europe, where long train journeys are possible and freight trains can traverse the Continent. However, Ireland lacks both the extensive network and long journeys to make this viable. The experience across Europe is no different. Rail freight activities are most economic where distances are long and where there are large volumes to be transported. All Members will have seen this down the years. It is the only way in which rail freight can have a positive outcome and can be competitive.

As part of this engagement with industry, I understand Iarnród Éireann also works closely with port authorities, such as in Dublin relating to transport of lead and zinc and Waterford relating to container traffic, to increase rail based freight. The Government's ports policy statement recognises the need for the integration of ports as a fundamental link in the supply chain with other transport modes, including rail. In the absence of opportunities or proposals for viable long-term rail freight business, the development and use of fiscal incentives would be difficult to justify.

Any views held by Opposition Members on how rail freight can be expanded within the existing business environment should be considered. The market for rail freight is now fully liberalised and if opportunities exist, I expect that many people would want to take them up.

As for the entire rail network, one can see that the enormous investment that has been made in recent years will ensure that Ireland will have a modern rail service. If Members can identify a need for freight and freight carriage, undoubtedly the infrastructure to carry it exists. I have gathered much information on this subject in recent years and have been involved in a major discussion on the issue conducted by the Oireachtas Joint Committee on Transport, which I chair. Consequently, I have become convinced that for rail freight to be competitive and sustainable, the projects taken on must entail large volumes of heavy goods that can be moved easily onto the railway.

Members should remember that the obligation to take a container, transport it from a factory to the nearest railway station, put it on a train and take it for export to Dublin Port, Waterford or wherever will result in higher costs than if one put the container on a truck and delivered it directly to the port. Many companies that sought to use rail freight have discovered this fact. I know of several companies from my native locality that examined the possibility of using the Dublin to Sligo line. However, they all found that it was much easier for them to transport their single container business to Dublin by road than by train. Another point to note in respect of industrial concerns is that they must now be able to give a definitive time of delivery. As many goods produced in Ireland are perishable and must be used rapidly, they must be transported quickly. If Ireland lacks the facilities to transport them, we will suffer severely.

The motion probably draws attention to the need to try to ascertain whether we can reduce our dependence on road freight. However, in so doing, the economics of the issue must be examined fully. As for the rail services, the investment made by Iarnród Éireann in recent years with regard to the upgrading of its rolling stock is to be welcomed. As I stated at the outset, yesterday witnessed the delivery of the first of the new rail carriages that will operate on the Dublin to Sligo line. This will facilitate an upgrade of the services on that line to a standard that everyone expects and people now have a right to travel by rail if they wish. Yesterday saw the unveiling of the first of 180 diesel rail cars that will enter Iarnród Éireann's fleet. It showed us how far the Government has taken the rail network.

As I stated earlier, I was in the House when proposals were made that all the regional railway lines to the west and some parts of the south should be closed and that the only services which should be maintained were those between Dublin and Cork and Dublin and Belfast. That decision was overturned and the Government has taken the initiative with regard to ensuring we have a proper service in place with rolling stock and a proper rail network.

Rail safety is as important as everything else. If we do not have proper rail safety we will have accidents and that is the one thing we do not want to happen. Iarnród Éireann is to be complimented on the way in which it runs its services and maintains its rolling stock and crossings.

Regarding rail freight and moving to rail, we have already seen that a number of large rail users found it more profitable to use road transport. I remember well when cement was transported by rail throughout the country. Now, the users and cement companies find it is much cheaper to take it by road with bulk tankers. This is one example of business which left railways and went back to roads.

The improvement in our road network will help us in the future. Roads will also become more competitive against rail transport. The investment in roads means companies can now transport goods by road and know exactly what time they will arrive. Logistics managers find it is much more feasible to run their businesses using roads. While the network is maintained, we have one or two advantages and should the opportunity arise for the transport of large, heavy and bulky goods we would be in a position to adjust the rail fleet and the rolling stock to take advantage of this change.

The amount of lead and zinc taken from Navan to Dublin is important. The proposed changes with regard to the extension of the passenger line to Navan will be of tremendous importance to the people who live in the area. None of these extensions would be feasible if we were dependent on rail freight. Rail freight business is a dwindling commodity in this country and will continue to dwindle so long as our roads improve and companies want to move their goods as fast as possible.

One of the major initiatives taken by the Government with regard to rail is the western rail corridor from Ennis to Claremorris and on to Collooney, which will be opened on a phased basis. This will mean we will have a rail network throughout the country, which is extremely important. If it was felt for environmental reasons that we must change our methods of transport of goods, we will have the rail network in place to do it. At present, it is not a viable opportunity except for extremely heavy and bulky goods.

Iarnród Éireann staff and management are to be complimented on the progress they made during the past ten years in improving the services available to the public and to anybody wishing to become involved with freight. In doing what it did, it ensured the rail network will be maintained and kept in a proper state. We must compliment the management and workers of Iarnród Éireann, some of whom have given life-long service to the company.

In progressing rail freight, suitable commodities for transport must be identified. The vision for the rail line proposed through this Private Members' motion cannot be achieved. Our national road transport system is improving all the time and we also see other problems which arise through this, such as issues with greenhouse gas and fuel emissions. We must tackle them as time goes on. Many people do not realise the emission levels of many vehicles used on our roads were cut considerably over recent years.

While we would all like to see more freight returned to the rail lines we must live in the real world, which dictates that it is more economic and viable for many of our industries not to use rail freight, but to use container and road freight services. We have the infrastructure left in place should it be necessary for us at some stage to return to rail freight. Iarnród Éireann will not miss any opportunity which comes its way with regard to providing rail freight services to any company in a position to provide the volume necessary to maintain it.

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