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Railhub Archive
1996-06-01 DoT-001
Department of Transport


Sir George Young welcomes formal handover of Eurostar to London and Continental Railways

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Channel Tunnel Rail Link
Union Railways

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Department of Transport

Sir George Young welcomes formal handover of Eurostar to London and Continental Railways

1 June 1996
source Department of Transport
type Press release

note 162

London and Continental Railways (LCR) formally took ownership of
European Passenger Services, the UK operators of the Eurostar
services between London and the Continent at midnight last night.

LCR marked the move by confirming that finance is now all in place
for the next phase of the Channel Tunnel Rail Link project. They have
also taken over Union Railways.

Commenting on this important day for CTRL and Eurostar, Sir George
Young, Secretary of State for Transport, said:

This is a significant moment in the development of international rail
travel in the UK. The privatisation of European Passenger Services
is critically important to the future success of the business. I
expect the private sector expertise of London and Continental
Railways, together with the expertise gained from consortia members
with a proven track record in transport, to make a big difference
to Eurostar in the future.

London and Continental have raised the large amount of private
funding needed for the development phase of the high speed link. It
is a clear demonstration of the widespread enthusiasm for and
confidence in the project.

Following the appointment of LCR at the end of February, a great deal
of work has been done to prepare for the transfer of European
Passenger Services and Union Railways, who have conceived and managed
the project so far, to the private sector.

LCR will now begin the development phase of the CTRL leading up to
construction, working within the parameters set by the Hybrid Bill
which recently completed its consideration by the House of Commons.
The next stage is consideration by a Select Committee of the House
of Lords. Construction will begin after the CTRL Bill is enacted
and once main financing has been achieved - currently anticipated
to be in late 1997.

Notes to Editors

1.London and Continental Railways (LCR) were appointed as the
promoter of the CTRL project in February 1996 and signed a
Development Agreement with the Government. LCR will finance, design ,
build, maintain and operate international services on the new 68
mile high speed line between St Pancras and the Channel Tunnel.
PN 64 refers.

2.The Development Agreement could not come into effect until certain
conditions had been met, most notably that the European Commission
had confirmed that the Governments support for the project and for
Union Railways (URL) and European Passenger Services (EPS) did not
constitute state aid. The commission gave the necessary clearance on
30 April.

3.All the conditions have now been met and the Agreement became fully
effective yesterday. Ownership of UR and EPS has been transferred to
LCR together with the leasehold of certain land and property.

4.LCR now own EPS outright and have taken over the operation of the
UK arm of the Eurostar services through the Channel Tunnel. LCR
recently announced a package of marketing initiatives designed to
build up the EPS business and to increase passenger numbers.

5.At the same time LCR have secured funding for the development phase
of the project leading up to the start of construction. This
comprises nearly #100m of equity invested by LCRs shareholders plus
substantial debt facilities provided by a group of commercial banks
and by the European Investment Bank. The development phase is
expected to last about 18 months.

# = pounds sterling

Railhub Archive ::: 1996-06-01 DoT-001


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