Evaluation of Rail Freight Facilities Grant Funding in Britain

Abstract

Rail freight has been generally in decline in many European Union countries in recent years, contrary to European transport policy. State support for railway operations is commonplace in most countries, and this paper establishes the background to targeted rail freight grant funding in Britain. Through desk‐based analysis of Freight Facilities Grant (FFG) awards, together with a survey of recipient companies, the paper assesses the extent to which the planned flows expected from these awards have materialized and it evaluates the role of the grants in influencing rail freight volumes. The evidence suggests that FFG funding has been largely successful, attracting considerable private sector investment. Overall, FFGs have played an important role in developing or retaining rail freight flows, although the processes could be made more transparent and consistent. As other European countries liberalize their rail freight markets as a result of European Union legislation, such targeted funding may be an appropriate alternative to more general government subsidy of freight operations.