Eurostar ‘cannot be allowed to collapse’ says Irish MEP

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The UK-European rail service’s future was thrown into question this year after the coronavirus pandemic significantly reduced its passenger count. It was saved in an eleventh-hour deal earlier this month after lenders offered some restbite. Eurostar will now refinance hundreds of millions of pounds of debt from a group of banks including Natwest.

This includes a total sum of £400million of loans, most of which was due to be paid back this summer.

While the railway company is secured for now, previous events suggest that further obstacles might be around the corner.

In 2015, Eurostar’s poilitcal situation was thrown into question after the UK sold its stake in it for over £750million.

Then Chancellor George Osborne described the transaction as a “fantastic deal” for Britain.

He said: “This is a very good deal – it means we can cut the national debt, it means we can invest in our national infrastructure and it’s fantastic value for British taxpayers.

“It’s all part of our long-term plan to secure Britain’s future.”

Others were less enthusiastic and appeared to accuse the UK of not caring about those who used the service.

This included Manuel Cortes, head of the Transport Salaried Staffs’ Association rail union, who was furious at the sale.

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He told the BBC: “George Osborne, because of his outdated belief in unvarnished Thatcherism, is once again selling off the family silver for short-term financial gain.

“The reason that France and Belgium already own the majority stake in Eurostar is that they believe in running a publicly owned railway for the benefit of everybody.”

Railways in Belgium and France are largely state-owned.

Meanwhile, the UK has 27 private rail contracts.

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Twenty of these are owned by foreign state-owned or backed railways, mainly in France, Germany and Holland.

When Eurostar opened in 1994, its proponents claimed it would be a runaway success.

In 1996, the official prediction was that the trains would be carrying 21.4 million passengers a year by 2004.

The actual figure was 7.3 million.

Under the 2015 deal, Patina Rail LLP acquired the UK Treasury’s entire share of the high-speed rail service.

The French and Belgian national railways continue to own the rest.

Britain had intended to sell off its Eurostar stake in 2013, in the Autumn Statement and National Infrastructure Plan.

Many thought the sale would not be a sensible decision in the long-run.

This was especially true after the service provider had a surge in growth after 2015, recording £92million in profits for 2019.

The pandemic has seriously dented this profit margin, however.

Eurostar’s annual revenues collapsed from £1billion (€1.1billion) in 2019 to about £180milllion (€208million) in 2020.

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