Four freight terminals closed in sell-off move

Four freight terminals have been closed by Railfreight Distribution, BR's main remaining rail freight company, in an effort to rationalise the operation in preparation for privatisation.

Four customers of the Connectrail service, which uses high volume wagons mainly for transport to and from ports, have been given a month's notice that they will no longer be served by trains.

The decision to cut some services is part of a widespread restructuring in the company which will result in redundancies "among all grades" of staff, according to a letter leaked to the Independent.

The move by Railfreight appears to fly in the face of Government policy to get more freight off roads and on to rail but RfD argues that it was no longer to serve these depots. A spokesman for the company said that the four terminals - at Ely, Gidea Park, Barking and Blackburn - were each used for only one or two wagons per week and this was not economic. He denied that the move had anything to do with privatisation: "We carry out these reviews every six months." He added that RfD was currently attracting new business on several routes through the Channel Tunnel.

However, a letter to the four customers from Bert Blissett, the general manager of RfD Connectrail makes it clear that the move has been instigated as a result of privatisation. The letter begins: "The intention of HM Government is to privatise RfD in the current financial year; a report commissioned from Mercer Management Consulting in this context is still being considered by the Government. Meanwhile, we are required to restructure the business with the objective of making it viable in the long term."

Mr Blissett says he may reconsider but only if there were five loaded wagons per trip.

The letter says that recent performance has been "poorer than had been expected", culminating in losses of pounds 60m for 1995/6. These are similar to the losses in 1994/5 and arise partly because of its investment in services through the Channel Tunnel which are only now starting to bear fruit. However, it is still severely loss-making and most industry observers doubt whether it can be sold during the current financial year.

One of the customers affected by the decision said he would be negotiating with RfD: "I am furious that they have done this without prior warning or discussion with us. It's a terribly off-handed way to work."

Earlier this week, it was announced that a management buyout team was the preferred bidder for Freightliner, BR's other remaining freight company.