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The owners of the high-speed rail line from London to Channel Tunnel provided price reductions to facilitate the launch of more international rail services with St. Pancrus Terminus in London.
London St. Pancras High Speed (LSPH) announced several financial incentives available to operators launching railway services between London and mainland Europe on Friday.
Over the past few months, several groups have announced plans to launch services between London and the continent. The only existing operator, Eurostar, has dominated services that primarily link London to Paris and Brussels since the launch of international passenger services in 1994.
LSPH, previously known as HS1, said that new entrants or EuroStar could take advantage of the discount if they launch a new service.
“In the history of British high-speed rail, we have never seen so much interest and potential for growth,” said Robert Sinclair, CEO of LSPH.
Sir Richard Branson’s Virgin Group is one of several operators considering launching a service that connects the UK with mainland Europe. EuroStar also has important growth plans.
However, newcomers face challenges. In particular, they face high costs of ordering trains and driving on high-speed UK trucks. LSPH charges about £7,600 per train fee.
Sinclair said it was “fair” that there is a “significant barrier to reference” in the cross-channel market.
“It’s not cheap to do,” he said. “The Growth Incentive Scheme is specifically designed for operators to reduce some of these costs and go beyond the entry barrier.”
Operators are always available to receive discounts until 2035. In the first year of a three-year discount, we offer a maximum discount of 50% on the “back-investment fee” element of the operator’s fee. The discount will decrease to 40% in the second year and 30% in the third place.
Investment recovery fees account for approximately £4,000 of the total cost of each trip.
LSPH said that the price reduction will allow each train operator to save between £40 million and £60 million over three years, depending on the nature of the service.
Operators can access discounts by launching services and destinations or investing in new trains. If Eurostar adds one additional train daily between London and Paris, the service qualifies for discounted access. Similarly, new operators can also be given discounts for each route, as everything is classified as new.
“Our hope is that these interventions will drive growth, bring competition and allow train services to increase by over 50% over the next few years,” Sinclair said.
A potential Eurostar competitor was boosted earlier this week after British railway regulators said there was space for rivals to access the company’s East London train depot.
Eurostar said it welcomed the LSPH proposal, which will be subject to consultations that begin on Friday. The scheme will then be set to go on operation on May 30th.
“Eurostar welcomes incentives to enable more sustainable international travel and support plans to operate more services,” it said.
The Virgin Group also welcomed the plan. “London St. Pancras High Speed is working hard to unlock competition on the cross-channel route, and the new international growth incentive scheme is a welcome step in the right direction,” the company said.
