Rail regulator consults on reduction in HS1 charges

Train operators will pay less to use High Speed 1 from next April, with forecasts of reduced renewals driving an overall 9% fall in charges.

In its draft determination of access charges for HS1’s Control Period 4 (CP4, April 1 2025-March 30 2030), the Office of Rail and Road proposes that Eurostar pays £312.3 million (down 7.7% from CP3), Southeastern pays £461.2m (down 10.8%), and East Midlands Railway pays £50.0m (which represents a 3.2% rise on CP3’s charges.

ORR published its figures on September 30 and is now running a consultation until November 11, after which it will prepare its final determination for publication on January 6 2025.

HS1 largely charges passenger operators per minute to use its 108.6km (67.5 mile) route from London St Pancras to the Channel Tunnel, which opened fully in 2007. For freight operators, HS1 levies charges per kilometre.

The main charge covers operations, maintenance and renewals (OMR), with variable charges per train kilometre classed as OMRCA1, fixed infrastructure costs per train minute as OMRCA2, common costs (such as office costs) per train minute as OMRCB, and pass-through costs (such as insurance) per train minute as OMRCC.

HS1 recovers costs for station renewals through a long-term charge (LTC). It charges separately for traction electricity.

This gives ORR’s proposed charge for international operators of £5.64 per train kilometre plus £59.31 per minute. A Eurostar service typically takes 31 minutes to run from St Pancras to HS1’s boundary with Eurotunnel, which would give an overall charge of around £2,450 per train.

ORR proposes charges for domestic operators of £2.27 per train kilometre plus £52.92 per minute. Freight operators will pay £7.74 per train kilometre.

It proposes LTC station charges for CP4 of £25.9m for St Pancras International, £6.5m for Stratford International, £6.1m for Ebbsfleet International, and £2.7m for Ashford International (totalling £41.1m).

When split between operators, this gives Eurostar a bill of £19.8m, while EMR will pay £5.2m and Southeastern will pay £16.1m in February 2023 prices. This total of £41.1m is less than HS1 wanted, having proposed £50.9m.

However, ORR only regulates OMR and LTC charges, leaving HS1 to decide its other two major charges - the investment recovery charge and the operations and maintenance charges for stations, known as QX charges which are based on actual costs.

ORR explained in its September 30 publication that it’s the increase in QX that’s responsible for EMR’s overall charges rising.

ORR calculates its draft determination by assessing High Speed 1’s five-year asset management statement (5YAMS), which HS1 produced earlier this year.

ORR said that HS1’s plans were of good quality, but that the draft determination proposes some opportunities for further efficiencies and cuts £3m from HS1’s proposed operations and maintenance spending.

CP4 renewals include a mid-life ballast replacement which ORR describes as “by far the largest renewal to date on HS1”.

It will renew ballast on half the track from 2029, which will cost around £90m and take several years. ORR warns that timings will likely slip, based on HS1’s experience with smaller track renewals in CP3 and ORR’s wider experience of Network Rail projects.

More widely, ORR notes that HS1 better understands its assets, which has led to forecast £140m savings over HS1’s 40-year renewal plan. HS1 has already moved away from simple, cyclic renewals to programmes based on asset knowledge and actual asset degradation.

ORR now wants HS1 to extend this switch to areas beyond track and overhead line equipment, so that train operators can benefit from the savings more quickly. Delaying the switch risks overcharging today’s users and undercharging those in future years, says ORR.

HS1 proposes no upgrades for CP4, but expects to start early works in 2024 to introduce European Rail Traffic Management System (ERTMS) signalling in the first half of CP5 (2030-35).