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As lockdown restrictions ease and we start to consider travelling again, the future of cross-Channel operator Eurostar remains uncertain.
Eurostar is seeking financial support from the UK Government, citing higher access charges here as a reason.
The French Government has pledged to provide support for the operator, while £200 million has been provided by one of its shareholders, Caisse de Dépôt et Placement du Québec (CDPQ) and Hermes Infrastructure.
Registered in the UK and supporting 3,000 jobs either with the business or in the supply chain, the company is, however, 55% owned by SNCF (French state rail), 40% by CDPQ/Hermes and 5% by SNCB (Belgian state railways).
So: Should the UK Government provide financial assistance to Eurostar?

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Concerns raised over French state support for Eurostar

Talks regarding the future of Eurostar were continuing as this issue of RAIL went to press, with reports suggesting figures of £400 million to £500m as being the focus of negotiations.

COVID and the resulting travel restrictions have decimated the service, with a decline in passenger numbers of up to 99% compared with pre-pandemic levels.

Currently, only one train per day is running from London-Paris and one from London-Amsterdam. No other routes are operating.

The French Rail Association (AFRA) has expressed concern about the French Government providing SNCF (the country’s state-owned operator and largest shareholder in Eurostar) with up to 585 million euros (£499m) support to Eurostar, at the same time as SNCF is spending 600 million euros on a new train fleet for its Spanish subsidiary.

In early March, Eurostar Chief Executive Jacques Damas told the Financial Times that the business was losing £500m a year, while later that month SNCF president Jean-Pierre Farandou told the same paper that Eurostar needed state aid within the month to get through the COVID crisis.

According to AFRA, which represents alternative operators in France, all public aid should be strictly regulated. It says that only “well-founded, legitimate and proportionate aid should be able to justify the mobilisation of public funds”.

AFRA President Claude Steinmetz said: “Under no circumstances should the state’s effort to support an operator affected by the crisis be used to finance, even indirectly, its international development.” He said any aid must be accompanied by commitments on counterparts.

This has raised the question of Eurostar disposing of its Class 373 rolling stock, instead of it being available for other operators to acquire. Eurostar has also declined to confirm whether the company’s remaining ‘373s’ and Class 374 fleet have been used as collateral against any debts the company has.

SNCF is the largest Eurostar shareholder, with a 55% stake in the business. The second largest is Caisse de Dépôt et Placement du Québec (CDPQ) and Hermes Infrastructure, which bought the UK Government’s 45% share in 2015. The smallest stakeholder is Belgian state operator SNCB (5%).

The French Government stated in late January that it would provide funding for the business, while CDPQ has already pumped some £200m into Eurostar in the past few months.

The UK Government is discussing options with its French counterpart. However, it has stated on more than one occasion that because Eurostar is no longer a British company, the company’s stakeholders should be the first to provide assistance.

  • For the FULL story, read RAIL 928, available now. 

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