Eurostar and HS1 Call for Government Support

[Ianno87]

From The Independent: https://www.independent.co.uk/trave...-government-support-coronavirus-b1724820.html

CASE FOR GOVERNMENT SUPPORT FOR HIGH SPEED RAIL​

‘To be clear, we have been fighting the battle under our own resources and we will continue to do so,’ says Eurostar and HS1 CEOs​

Dyan Crowther,Jacques Damas
8 hours ago


A perfect storm brewing over the Channel is posing a real threat to the most environmentally friendly way to travel to mainland Europe.
A dramatic fall in Eurostar passenger numbers resulting from Covid-19 restrictions, alongside a looming Brexit deadline, is threatening the very existence of international train travel from the UK. With less than a year to go before the UK hosts the COP26 environmental summit, the green gateway to Europe is in a fight for its survival.

Almost unthinkable for Eurostar to fail...

 

[squizzler]

Perhaps the government should pay Eurostar to park all their trains in January and use the tunnel and HS1 as a freight dedicated route to replace lorry traffic after the EU membership "transition period" ends?

That would both effectively "furlough" Eurostar, keep HS1 solvent, and actually secure a useful piece of infrastructure for a period of great uncertainty.

 

[HSTEd]

Why should I care if a privately owned company goes under?

What's the point of privatisation if they just start screaming for bailouts whenever the going gets tough.
Also I'm not clear why Eurostar will stop South Eastern running on HS1.....

A dramatic fall in Eurostar passenger numbers resulting from Covid-19 restrictions, alongside a looming Brexit deadline, is threatening the very existence of international train travel from the UK

So Eurostar runs Enterprise now?

 

[Richard Scott]

Why should I care if a privately owned company goes under?

What's the point of privatisation if they just start screaming for bailouts whenever the going gets tough.

The issue is the current situation isn't their fault and difficult to ride out. Political decisions have caused this not a bad business set up. I have no idea what it's worth to the UK economy but expect it's reasonable so may be worth caring about? There are British people working for this company and they pay tax etc. Also remember there are a significant number of wealthy French people living in London who probably rely on this service in normal times. They pay tax and spend money in this country, all these things need to be considered. Like the virus there's more than one issue here.

 

[Ianno87]

Why should I care if a privately owned company goes under?

What's the point of privatisation if they just start screaming for bailouts whenever the going gets tough.

They cannot trade in the usual way because of government-imposed restrictions.

And Eurostar have provided the core transport link between London and Paris/Brussels for the last quarter century. Something of huge economic and social value to the UK.

Also I'm not clear why Eurostar will stop South Eastern running on HS1.....

I'd presume that HS1 Ltd would struggle if you took away the track access charges paid by Eurostar. And if there's no operational HS1, there's nothing for South Eastern to run on.

So Eurostar runs Enterprise now?

Clearly not. But HS1 probably represents roughly about 85% of international passenger rail service demand (with the remaining 15% being the Enterprise)

 

[IanXC]

Also I'm not clear why Eurostar will stop South Eastern running on HS1.....

Seems quite clear from the article, if Eurostar fails, then HS1 fails, if HS1 is closed then how does South Eastern run on HS1?

It seems to me that the government would be very silly to overlook this, if you've just launched a 10 point plan for Climate Action, announced a new challenging Carbon Emissions target and are hosts of COP26, it would be rather embarrassing to loose this link and see its business move to the airlines!

 

[HSTEd]

Seems quite clear from the article, if Eurostar fails, then HS1 fails, if HS1 is closed then how does South Eastern run on HS1?

If HS1 fails, it will go into receivership and will stay open until a buyer is found. If HS1 somehow goes into full blown liquidation, someone else will buy the line for a song and keep it open, possibly triaging infrastructure maintenance to maintain the level required to meet its non Eurostar commitments.

It is extraordinarily unlikely that the line will outright close.

It seems to me that the government would be very silly to overlook this, if you've just launched a 10 point plan for Climate Action, announced a new challenging Carbon Emissions target and are hosts of COP26, it would be rather embarrassing to loose this link and see its business move to the airlines!

But there is no business to move to the airlines?
International travel is not going to recover any time soon.

 

[IanXC]

If HS1 fails, it will go into receivership and will stay open until a buyer is found. If HS1 somehow goes into full blown liquidation, someone else will buy the line for a song and keep it open, possibly triaging infrastructure maintenance to maintain the level required to meet its non Eurostar commitments.

It is extraordinarily unlikely that the line will outright close.

HS1 would only go into receivership if the receiver believes there is a meaningful chance of the business continuing as a going concern. Where this might be the case in the short term, the outcome of Eurostar's hypothetical receivership/liquidation is likely to have a significant impact on the HS1 receiver's view of the situation.

Thus HS1 is very likely to follow the path of Eurostar. If there is no movement to support Eurostar, nor to reduce its UK track access charges (which are three times those of the SNCF routes its uses) then its hard to see what the route out of receivership would be. Thus a Eurostar liquidation is highly likely to result in a HS1 liquidation.

Of course if all of that were to happen you're right that the route could be sold for a discounted price, however I would be astounded if all of that happened without a significant period of disruption to South Eastern services.

But there is no business to move to the airlines?
International travel is not going to recover any time soon.

Right now? Agreed there isn't.

In 6 months? Eurostar has the potential to resume, and potentially increase, its market share on Paris and Brussels.

Then add in further routes that have the potential to contribute towards a reduction in CO2 emissions and the idea the government would accept headlines and the reputational damage of a massive increase in aviation's market share, and hence emissions on these kinds of routes should be fanciful.

 

[Bantamzen]

Why should I care if a privately owned company goes under?

What's the point of privatisation if they just start screaming for bailouts whenever the going gets tough.
Also I'm not clear why Eurostar will stop South Eastern running on HS1.....

If you don't use their services, nor depend on an income either directly or indirectly from Eurostar then you don't need to care. However for every private business that fails, people lose jobs and if too many people lose their jobs that can have an impact on the health of the economy & that might have an effect on you. At a time like this it is all about the bigger picture.

If HS1 fails, it will go into receivership and will stay open until a buyer is found. If HS1 somehow goes into full blown liquidation, someone else will buy the line for a song and keep it open, possibly triaging infrastructure maintenance to maintain the level required to meet its non Eurostar commitments.

It is extraordinarily unlikely that the line will outright close.

Unlikely maybe, but not impossible especially given the political situation in the UK right now.

But there is no business to move to the airlines?
International travel is not going to recover any time soon.

International travel will recover a lot more quickly than people imagine, a lot of economies around the world depend on it.

 

[squizzler]

However for every private business that fails, people lose jobs and if too many people lose their jobs that can have an impact on the health of the economy & that might have an effect on you. At a time like this it is all about the bigger picture.

In the scenario described for HS1 the only losers would be the financiers who own stock in the company. The railway itself and the staff working on it would still be in business, maybe without any disruption, and in a stronger position because much of the legacy debt would be written off.

 

[HSTEd]

Does the HS1 Concession agreement include provisions for insolvency?

 

[LNW-GW Joint]

It's not exactly a good time for the British and French governments (and probably Belgian too as they are part-owners) to get together and cooperatively agree a support package for Eurostar.
Any cross-channel support deal would also have to include private-sector ferries and airlines, which don't have any support by the UK at the moment (bar maybe commercial loans).

 

[Yew]

Privatize the profits and socialize the losses...

 

[LNW-GW Joint]

In the scenario described for HS1 the only losers would be the financiers who own stock in the company. The railway itself and the staff working on it would still be in business, maybe without any disruption, and in a stronger position because much of the legacy debt would be written off.

The "financiers" of HS1 are the UK government.
They have sold rights to use the capacity of HS1 to finance companies (mainly French/Canadian), but the infrastructure remains in government hands.
Eurostar itself as an operator is a majority-owned French company - SNCF is the largest shareholder.