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13.10.14

UK government targets quick Eurostar stake sale

The government has started the process to sell off its 40% share in Eurostar, the high-speed train operating company, by early next year. 

In a release sent out by the Treasury, the chancellor has asked for any parties interested in purchasing the stake to come forward – with a deadline of 31 October to respond.  It added that subject to achieving value for money, “we would expect to reach definitive agreements in the first quarter of 2015”. 

George Osborne believes that the sale of the high-speed line connecting London to Paris, which includes a fleet of 27 Class 373/1 sets, will raise around £300m for the Treasury. 

Britain has part-owned Eurostar for the last 20 years. In addition to the UK’s 40% share, the French state-owned rail operator SNCF has a 55% shareholding, while Belgian counterpart SNCB has 5%. 

The Treasury stated that the Autumn Statement 2013 and National Infrastructure Plan 2013 set out the government’s ambition to achieve £20bn from corporate and financial asset sales by 2020. “Having identified the government’s stake in Eurostar as a possible candidate for sale, the government has now started the sale process,” the department added. 

Osborne said: “I am determined that we go on making the decisions to reform the British economy and tackle our debts. So we will proceed with the potential sale of the UK’s shareholding in Eurostar today. 

“Ensuring we can deliver the best quality infrastructure for Britain and the best value for money for the taxpayer are key parts of our long-term economic plan.” 

However, the shadow transport secretary, Mary Creagh, has stated that the National Audit Office (NAO) should “urgently” conduct a value-for-money enquiry into the sale of the Eurostar stake. 

She said: “Eurostar is a national strategic asset that is set to grow and to return increased profits to the UK taxpayer with new routes to Geneva, Lyon, Marseille and Amsterdam. After the staggering incompetence of the Royal Mail sale fiasco, which lost taxpayers a billion pounds, people will worry that this is yet another rushed and undervalued sell-off. 

“City adviser UBS made millions from Royal Mail and is advising on the Eurostar sale. Lord Myners is still conducting his review into government privatisations after Royal Mail, and ministers should await his report before any sale begins.” 

Mick Cash, general secretary of the RMT rail union, added that the Eurostar sale could see more of the UK's railways in foreign hands. 

“This compounds the issue of foreign ownership of Britain's railways as the French state has first refusal on our slice of the highly profitable Eurostar cake,” he said. “The French and Belgians think we are insane knocking off such a valuable and strategic infrastructure asset.” 

Eurostar was, until 2010, operated jointly by the national railway companies of France and Belgium, SNCF and SNCB, and Eurostar (UK) Ltd (EUKL), a subsidiary of London and Continental Railways (LCR). But in June this year the UK government's holding transferred from LCR to the Treasury. 

(Image: c. Oxyman)

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