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Tunnel freight plan for London awaits Consignia backing


TROUBLED MAIL operator Consignia is holding up plans to transfer much of London's lorry freight underground onto the capital's network of mail tunnels, business leaders warned this week.

Consignia (Royal Mail) owns the tunnels and is a 28% shareholder in the Metrofreight consortium. This is trying to raise £130M to adapt the network of 2.5m diameter tunnels to deliver retail goods to big department stores in central London (NCE 4 October).

And although a new business case for the scheme - seen as vital for cutting congestion in central London - is expected to be presented to banks soon, business leaders told NCE this week that they feared Consignia had lost interest.

'Consignia has got to be a partner in this project, but inertia would sum up its role so far, ' said a source at business lobbyist London First, which is backing the scheme. 'It's obviously got a lot on its plate at the moment, but it is potentially a good investment opportunity.'

So far, the consortium, which includes Kier Construction, J Murphy & Sons, John Lewis Partnership and HSBC, has invested £750,000 in a proposal to develop a computerised fleet of 50 rubber tyred, self propelled vehicles.

These would unload at a series of interchanges in the tunnels.

The tunnels, which date from the 1920s, would have to be widened at the unloading points and an extension to the network would need to be bored from Paddington to a freight depot in Willesden Junction in north west London.

The project partners last week met to agree to put together a new business case to convince backers that the investment will pay for itself in nine years. The business case is expected to be strengthened by the higher costs freight operators would have to pay under plans to charge lorries £5 to enter central London. This was approved by London Mayor Ken Livingstone this week.

'Congestion charging will change the business case because that would make it much cheaper for freight operators to use the tunnels and enable the consortium to charge more for use of the tunnels and still undercut lorry freight costs, ' said a London First source.

'What we need to do now is put together a small group of people who know about getting projects started and get them to advise the project partners on how to make a breakthrough and get it moving.'

It is hoped that an improved business case will secure Consignia's support for the project.

But a Consignia spokesperson would not be drawn this week.

'We weren't taking an active role in the project because the business case wasn't sufficient to be attractive, ' said the spokesperson. 'At the moment, we are reviewing our transport policies and Metrofreight is one of the things that is being looked at.'

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