Eurotunnel plan to reduce charges

28 April 2014
by eub2 -- last modified 28 April 2014

Eurotunnel on 28 April 2014 committed to reduce the level of track access charges imposed on rail freight operators using the Tunnel by up to 50%. The European Commission welcomed the announcement, which, it said, should allow rail freight in the Channel Tunnel to double in the next 5 years.

The Channel Tunnel is not being used to capacity, and a major reason for that has been high track access charges. As a result, more freight has been carried on lorries, instead of by rail, and the high charges paid by freight operators can be passed onto their customers.

Currently only seven rail freight trains run through the tunnel each day on average, while there is 43% unused capacity. Rail freight companies complain that excessive track access charges and other mandatory charges make it uneconomic to use the Tunnel.

The commitment by Eurotunnel is a direct response to the legal investigation opened by the European Commission against France and the UK for failure to implement European rules on access to infrastructure in the Channel Tunnel, in June 2013.

Eurotunnel's new freight charging scheme

Under Eurotunnel's new freight charging scheme, a new entrant running trains in the time periods (intervals), most used by freight, could benefit from up to 50% reduction in freight charges compared to the current situation. The average charge reduction will vary, but is estimated to be between 30% and 45% percent.

The key measures include:

• Rail freight tolls for "off-peak period" periods (intervals) will be reduced by 25%, while the toll for the "weekend maintenance" interval will be reduced by 33.3 %
• The most expensive maintenance period will be reduced from three to two nights per week
• Charges will not be adapted to the inflation rate until 2018
• The current incentive scheme, giving rebates to new entrants (ETICA) will be prolonged and will apply to more types of freight trains
• The security fee imposed on freight operators (Frethun charge) will be eliminated (600€ France – UK per train).

The new charge scheme will be applicable from June 2014, and remain in operation until 2023.

The European Commission investigation

In June 2013, the European Commission opened a legal investigation (infringement procedure) against France and the UK for failure to implement European rules regarding the Channel Tunnel. The proceedings cover four different areas: transparency of costs, setting of charges, independence of the Regulator – Intergovernmental Commission (IGC) and the capacity allocation in the tunnel guaranteed by the Railway Usage Agreement (RUC).

With regard to the different aspects of the infringement, the European Commission says it also welcomes:

A decision by the Tunnel Regulator on transparency of costs

The Channel Tunnel regulator (IGC) has recently issued a decision that obliges Eurotunnel to make its costs more transparent. This is an important step forwards, as the actual costs of use of the infrastructure is a key element in determining the level of track access charges allowed under EU law. If strongly enforced, this decision should allow for a more transparent charging in the tunnel for passengers and freight.

What happens next?

The Commission will assess implementation of these measures in the context of its ongoing infringement case.

Eurotunnel - key facts (source Eurotunnel):

43% of tunnel capacity is currently unused.

Rail passenger traffic has increased slowly in recent years - 9.9 million passengers used the Tunnel in 2012 compared to 9.7 in 2011.

However, rail freight traffic is declining. Only 2,325 freight trains passed through the tunnel in 2012 (down from 2,388 in 2011 and 2,718 in 2008).

Since its opening in 1994, Eurotunnel has been unable to attract a sufficient amount of rail freight traffic for its railway infrastructure. In 2013, there were only seven rail freight trains going through the tunnel every day, instead of 30-40 a day as originally envisaged when the tunnel was opened.

One of the significant obstacles to the growth of the freight traffic is the high access charges which currently amount up to €6075 per freight train, while the average charge for a freight train going through the tunnel one way is approximately €4,500 per freight train.

Shuttle services (both passenger and freight) operated by Eurotunnel are excluded from most EU rail rules including on track access charging and are not covered by the EC infringement.