The successful bidder in a sale of the concession to run Britain’s first high speed railway, ‘High Speed 1’, was announced today by Transport Secretary Philip Hammond as a consortium comprising Borealis Infrastructure and Ontario Teachers’ Pension Plan. The consortium will pay the Government a total concession value of £2.1bn to operate the line for the next 30 years in a sale which will help reduce the UK’s record debt and provide opportunities for new services on the line.
The consortium will take on the management of the 68 mile line which links London to the Channel Tunnel following completion later this month. The consortium will be responsible for running the line as well as stations such as St Pancras International, and the international stations at Stratford, Ashford and Ebbsfleet.
Philip Hammond said:
“This is great news for taxpayers and rail passengers alike. It is a big vote of confidence in UK plc and a big vote of market confidence in the future of high speed rail. It also shows that the decisive action this Government has taken to reduce the deficit is already paying dividends and that investors believe once again that Britain is open for business.
“The £2.1bn receipt exceeds the highest expectations for the sale and will make a welcome contribution to reducing the deficit.
“I look forward to working with the new concessionaire and to the benefits passengers will see as High Speed 1 seeks to attract new services to the line, allowing British passengers to travel by high speed train to even more destinations across Europe.
“This is an exciting time for rail travel and an important step in our plans to develop a truly national and international high speed network for British travellers.”
The successful sale was managed for the Government by London and Continental Railways Ltd. Commenting on today’s announcement, LCR Chief Executive Mark Bayley said:
“High Speed 1 is a unique, high quality infrastructure asset which speeds tens of thousands of people between London, Kent and continental Europe every day. I am very proud to have been associated with the business and its excellent management, and believe that we have achieved an extremely good price for HS1 through a very competitive process.”
High Speed 1 is currently used by international Eurostar services between London and European destinations as well as domestic high speed services between London and Kent. The performance of the new operator of the line will be independently policed by the Office of Rail Regulation to ensure that rail passengers’ interests are effectively safeguarded. The Government began a competition for rights to run the line in June 2010.
UBS acted as financial adviser to LCR on the sale of HS1. Citi advised DfT in relation to the sale.