CONTRACTS covering the sale of Railfreight Distribution to English Welsh & Scottish Railway were exchanged on March 13, but British Rail cannot hand over its last train operating business until the European Commission has given the all clear. Among other things at issue is SNCF’s complaint that the British government would be acting illegally by paying Eurotunnel (through the husk of BR) the difference between Tunnel tariffs and RfD’s share of the Minimum Usage Charge; this was £26m in 1995.

Pointing to the recent Fr134bn debt write-off, Eurotunnnel Freight Director Jim Evans told SMi’s Pan-European Rail freight conference on March 12 that SNCF’s objection lacked credibility, and ’may be nothing more than a crude attempt at blackmail.’ He believed the real objective was to force the French government to assume matching liability for SNCF’s share of the MUC - the main reason why both Eurostar and Tunnel freight produce massive losses.

Another factor is what Evans described as an ’absolutely negative attitude’ to open access by SNCF, which fears that EWS will use Directive 91/440 to attack the continental market from a platform of subsidy paid by the British government to get RfD off its back.

With freight and passenger traffic barely a third of forecast levels, ET’s rail tariff revenues fall far short of the MUC. Yet on March 11 Britain’s Rail Freight Group (representing operators and shippers) blamed Eurotunnel’s high tariffs for the fact that Tunnel rail freight is ’almost stagnant’ at 2·4 million tonnes a year. This is little more than the 2 million tonnes that BR was shifting in the 1980s on its Dover - Dunkerque train ferry and Harwich - Zeebrugge container ships.

RFG points out that ’rates for sending rail freight through the Tunnel are generally double the equivalent cost of using the shuttle or ferry. It would sometimes be cheaper to unload a container at Ashford, send it across by road, and reload it onto a train at Calais.’ A colourful way of putting it, perhaps, but Evans admitted this was ’true, but tough’ - meaning that ET’s tariffs (like the MUC) are set by the 1987 Railway Usage Contract which BR and SNCF have refused to renegotiate; only when these provisions expire in 2006 will rail traffic ’revert to market pricing’, he said.

Evans suggested that the £200m promised to top up freight MUCs until 2006 ’puts the operator in a better position to reflect the market price.’ Actually, the reverse is true. All the while BR had to pay £26m a year regardless of tonnage hauled by RfD, ET’s tariff per tonne was irrelevant. Now EWS will have to hand over real money for every load that could otherwise cross the Channel by ferry at half the price. With Tunnel tariffs accounting for a third of all infrastructure charges between London and K