AusRAIL, Market Sectors

UK Government to sell Eurostar share

<span class="" id="parent-fieldname-description"> The UK Government has announced that it will be selling its 40% shareholding in the Eurostar high-speed train operations between the UK and Europe. </span> <p>The UK Government is seeking to divest its share as part of a planned five-year &pound20bn sale of publicly owned assets to reduce debt, though as critics have pointed out the estimated $300m sale price will hardly make a dent in the UK’s public liabilities. <br /><br />Since 1994 Eurostar high-speed services have linked London with major European destinations, mainly Paris and Brussels, via the Channel Tunnel.<br /><br />Eurostar has since carried over 145 million passengers, with over 10 million in 2013 alone, whilst sustaining traffic growth every year for the last decade.<br /><br />Ownership of the operation has undergone several changes over the last two decades, but is currently shared between the UK Treasury (40%), French Government rail operator SNCF (55%) and Belgian Railways (5%).&nbsp <br /><br />Sales revenue for the 2013 calendar year was up 7% year-on-year to &pound857m reflecting strong growth in corporate and leisure sales delivering an operating profit of &pound54m, up 4% year-on-year. The UK government received a &pound7.4m dividend as a result of this<br /><br />Eurostar is currently waiting on a fleet of ten new Siemens AG built e320 trains that it expects to progressively enter service in 2015, once a number of technical issues are resolved. <br /><br />The 10 new trains, purchased for &pound700m, have 20% more capacity than the existing fleet and are designed for a top speed of 320km/h, 20km/h faster than at present.<br /><br />These will be used to expand the number of Eurostar destinations to Germany, Switzerland and The Netherlands.&nbsp&nbsp <br /><br />Swiss bank UBS is handling the sale on behalf of the government, with a deadline of 31 October 2014 for interested parties to respond to the pre-qualification letter.<br /><br />Media reports suggest it is unlikely that SNCF will take up its options to purchase the additional 40% stake and the government anticipates pension companies, investment funds and infrastructure funds as the likeliest bidders. <br /><br />The government says that subject to achieving value for money, it would expect to reach definitive agreements in the first quarter of 2015.</p>