Friday September 5, 05:00 PM
EWS says pricing legal case 'historic'
By Robert Wright, Transport Correspondent
Britain's biggest railfreight operator has said a £25m legal action it faces over anti-competitive pricing is a "historic matter" that has no relation to how it currently conducts business. EWS, which is owned by Germany's
Deutsche Bahn, faces a claim by rival Freightliner in the competition appeal tribunal for compensation over its behaviour in the coal haulage market between 1996 and 2005. One person involved estimated the value of Freightliner's claim at £25m.EWS paid a £4.1m fine following a finding by the Office of Rail Regulation in November (Frankfurt: A0S9N7 - news) 2006 that it had used anti-competitive behaviour when it tried to prevent Freightliner from breaking into the heavy-haul freight market in the late 1990s and early this decade. Freightliner's claim says that the ORR found EWS had entered into anti-competitive contracts between 1996 and 2005. It also found it had used predatory pricing against Freightliner between July 2002 and December 2003. EWS said the issue had been investigated by the ORR and settled. "The claim does not relate to current EWS market activities and practices," the company said. EWS, originally founded by Ed Burkhardt, a US rail entrepreneur, as part of his Wisconsin Central group, bought all of the freight businesses of the former British Rail state monopoly at privatisation, except for its Freightliner container business. The company consequently had a monopoly on most forms of freight haulage in the years immediately following the mid-1990s privatisation. Freightliner's claim relates to events surrounding its initial effort to break into EWS's coal haulage monopoly when it set up its Heavy Haul division. Coal, which is hard to carry in large volumes by other means, is one of the most lucrative commodities for rail freight operators. EWS said that the coal haulage market was now far more competitive, with competition not only from Freightliner but also from FirstGroup's GB Railfreight subsidiary and Jarvis's Fastline. Deutsche Bahn bought EWS in June last year from a consortium including Canada's CN Rail. Freightliner was bought in June this year by Arcapita, a Bahrain-based venture capital fund. The 2006 judgment by the ORR was the regulatory body's first finding of anti-competitive behaviour.
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