High Speed 1 - The Project

The Project

As the 1987 Channel Tunnel Act made government funding for a Channel tunnel rail link unlawful, construction did not take place as it was not financially viable. Construction was delayed until passage of the Channel Tunnel Rail Link Act 1996 which provided construction powers that ran for the following 10 years. The chief executive of the time Rob Holden stated that it was the "largest land acquisition programme since the Second World War".

The whole route was to have been built as a single project, but in 1998 serious financial difficulties arose, and extensive changes came with a British government rescue plan. To reduce risk, the line was split into two separate phases, to be managed by Union Railways (South) and Union Railways (North). A recovery programme was agreed whereby LCR sold government-backed bonds worth £1.6 billion to pay for the construction of section 1, with the future of section 2 still not settled.

The original intention had been for the new railway, once completed, to be run by Union Railways as a separate line from the rest of the British railway network. However, as part of the 1998 rescue it was agreed that, following completion, section 1 would be purchased by Railtrack with an option to purchase section 2. In return, Railtrack was committed to operate the whole route as well as St Pancras railway station, which, unlike all other former British Rail stations, was transferred to LCR/Union Railways in 1996.

In 2001, Railtrack announced that, due to its own financial problems, it would not undertake to purchase section 2, triggering a second restructuring. The 2002 plan agreed that the two sections would have different owners (Railtrack for section 1, LCR for section 2) but with common Railtrack management. Following further financial problems at Railtrack, its interest was sold back to LCR, who then sold the operating rights for the completed line to Network Rail, Railtrack's successor. Under this arrangement LCR became the sole owner of both sections of the CTRL and the St Pancras property, as per the original 1996 plan. Amendments were made in 2001 for the new station at Stratford International and connections to the West Coast Main Line.

As a consequence of the restructuring, in 2006 the LCR consortium consisted of construction firms Arup, Bechtel, Halcrow and Systra (who form Rail Link Engineering (RLE)), transport operators National Express Group and SNCF (who operate the Eurostar (UK) share of the Eurostar service with the National Railway Company of Belgium and British Airways), electricity company EDF and UBS Investment Bank. On completion of section 1 by RLE, the line was handed over to Union Railways (South), who then handed it over to London & Continental Stations and Property (LCSP), the long-term owners of the line. Once section 2 of the line had been completed it was handed over to Union Railways (North), who handed it over to LCSP. The entire line, including St Pancras, is managed, operated and maintained by Network Rail (CTRL).

In February 2006 there were rumours that a 'third party' (believed to be a consortium headed by banker Sir Adrian Montague) had expressed an interest in buying out the present partners in the project. LCR shareholders rejected the proposal, and the government, who effectively could overrule shareholders' decisions as a result of LCR's reclassification as a state-owned body, decided that discussions with shareholders would not take place imminently, effectively backing shareholders' views on the proposed takeover.

By May 2009 LCR had become insolvent and the government received agreement to use state aid to purchase the line and also to open it up to competition to allow other services to use it apart from Eurostar. LCR's thitherto wholly owned subsidiary, HS1 Ltd, thus became the property of the Secretary of State for Transport. On 12 October 2009 a proposal was announced to sell £16 billion of state assets including HS1 Ltd in the following two years to cut UK public debt. The government announced on 5 November 2010 that a concession to operate the line for 30 years had been sold for £2.1 billion to a consortium of Canadian investors. Under the concession, HS1 Ltd has the rights to sell access to track and to the four international stations (St Pancras, Stratford, Ebbsfleet and Ashford) on a commercial basis, under the scrutiny of the Office of Rail Regulation. At the end of 30 years, ownership of the assets will revert to government.