EUROPE: High Speed 1 concessionaire London St Pancras Highspeed has announced a International Growth Incentive Scheme designed to encourage new and existing train operators to introduce services and increase passenger volumes on the route between London and the Channel Tunnel.
Two incentives
The proposed scheme has two elements.
A New Services Incentive will offer a discount on the Investment Recovery Charge which operators pay to use the line. This will be worth up to 50% in year one, 40% in year two and 30% in year three. The discount will be offered for new international services, new destinations, deploying new rolling stock and to incentivise stops at Stratford International, Ebbsfleet International and Ashford International stations which Eurostar does not currently serve.
A Passenger Incentive will offer a £1 rebate for every additional passenger carried above previous levels. This is to be paid into a joint fund to support marketing and other activities to grow passenger demand.
The total amount payable to a specific train operator could be in the order of £40m to £60m in total over three years. The incentives would available to an operator for three years, and an operator may only access them once.
Consultation with operators and regulator the Office of Rail & Road is to run from April 4 to May 7. Subject to the outcome the scheme is set to commence on May 30 2025 and run until March 31 2035
Separately, from April 1 charges to operate on HS1 have been reduced by 20% and station renewal charges by around 30%.
Groundbreaking proposal
London St Pancras Highspeed said the line from London to the Channel Tunnel currently operates at 50% capacity. It wants to maximise the number of international services to drive growth, offer greater choice and lower fares to passengers, increase sustainable tourism and provide a valuable boost to the UK economy.
‘The International Growth Incentive Scheme is an innovative and groundbreaking proposal designed to boost international rail travel with more services to more destinations in Europe’, said CEO Robert Sinclair. ’We are enabling operators to expand their services, increase the network of destinations they serve and invest in new rolling stock.
’Our ambition is to make rail the preferred mode of travel to Europe, and we know that high-speed rail can reduce carbon emissions by up to 96% compared with flying. We believe this will boost the UK’s economic growth and contribute to our national effort to cut carbon.’
Responses
The scheme was welcomed by Nick Brooks, Secretary General of the AllRail alliance of New Entrants to the passenger market. He said it ‘is a move in the right direction, because it is a non-discriminatory development that treats all operators the same way, helping new services with high up-front investment costs to shoulder the burden in the ramp-up period’.
Incumbent operator Eurostar said it ‘welcomes any incentives which enable more sustainable international travel and support our plans to run more services’. It believes the scheme could provide ‘the financial headroom’ to make investments to enhance the customer experience, including at St Pancras station. New destinations would be considered in the longer term following delivery of the new fleet of 50 trains which is currently being procured.
Adrian Quine, CEO of Gemini Trains which recently announced plans to enter the cross-Channel market, said the scheme ‘will further strengthen our plan for competitively priced fares, attracting more people to make the shift from road and air to rail. We are now seriously assessing whether this scheme will enable us to offer additional new and exciting routes.’
Virgin Group said ‘London St Pancras Highspeed 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. It will stimulate choice and encourage both new and established operators to be dynamic and creative.’
Diccon Spain, Ashford councillor and spokesperson for the Bring Back Euro Trains campaign to reinstate cross-Channel rail services from Kent, told Railway Gazette International that the announcement was ‘a ray of sunshine’ for Ashford International station which has not been served by Eurostar since 2020.
He believes ‘the potential is incredible’ for the station which ‘would be the envy of many small European cities’, with regional rail connections and a large car park. He said there is ‘plenty of latent demand’ for services from Kent and ‘all to play for, for new operators coming in’.
