Virgin Trains wins approval to challenge Eurostar on Channel Tunnel services

Virgin Trains has won the go ahead from the rail regulator to challenge Eurostar’s monopoly on passenger services through the Channel Tunnel by 2030.

 

The company beat off challenges from rival high-speed rail start-ups Evolyn, Gemini and Trenitalia to gain shared access to a key maintenance depot in north London.

 

The Office of Rail and Road (ORR) described access to the Temple Mills facility as “an important first step” towards being able to operate cross border train services using the Channel Tunnel. 

 

Virgin Trains plans to carry six million passengers a year, invest £700 million and create 400 new jobs in the UK.

 

Virgin Group founder Sir Richard Branson said: “The ORR’s decision is the right one for consumers - it’s time to end this 30-year monopoly and bring some Virgin magic to the cross-Channel route. 

 

"Virgin is no stranger to delivering award-winning rail services, and just as we have successfully challenged incumbents in air, cruise and rail, we’re ready to do it again. 

 

"We’re going to shake-up the cross-Channel route for good and give consumers the choice they deserve.” 

 

Virgin plans to run services from London St Pancras to Paris, Brussels and Amsterdam, with ambitions to expand further across France and into Germany and Switzerland. 

 

The company also confirmed that if either Ebbsfleet International or Ashford International station are reopened in Kent, then Virgin will stop there. 

 

It is working with Kent County Council and other local stakeholders to explore how to make this happen, according to the company.

 

Virgin made an exclusive agreement with global train manufacturer Alstom to purchase 12 Avelia Stream trains earlier in the year.

 

The company today confirmed the funding consortium behind the project. Equitix, described as being one of Europe’s leading infrastructure investors with an extensive track record in financing rolling stock, will fund the trains. 

 

Virgin Group will lead the funding of the operating company alongside Equitix and private equity firm Azzurra Capital.

 

The ORR said: “This decision unlocks plans for around £700 million of investment in new services and the creation of 400 new jobs, in a win for passengers, customer choice, and economic growth. 

 

“Virgin Trains can now be confident it will have access to the light maintenance facilities it needs to run its planned international services.”

 

The ORR noted: “Informed by independent analysis, and having also considered Eurostar’s growth plans, the regulator considers that Virgin Trains has the strongest prospects of making the best use of capacity at Temple Mills.  

 

“Overall, Virgin Trains’ plans were more financially and operationally robust than those of other applicants, and it provided clear evidence of investor backing and an agreement in principle to deliver the necessary and appropriate rolling stock.” 

 

The regulator added: “Many stakeholders wrote to ORR to welcome the prospect of competition on the High Speed 1 line, which is expected to increase choice for passengers, and many also wrote concerning the reopening of stations in Kent. 

 

“ORR’s decision today however strictly concerns access to Temple Mills; it does not, and ORR cannot, require Virgin Trains to run specific services or stop them from changing what destinations they plan to serve. 

 

“There are a number of steps before new international services will be able to run. Virgin Trains will now need to enter into a commercial agreement with Eurostar, as the operator of Temple Mills, and must secure finance, access to track and stations, and safety approvals from ORR and the relevant authorities in the EU. Virgin Trains plans to begin running services in 2030.”  

 

ORR access and international deputy director Martin Jones said: "With this decision we are backing customer choice and competition in international rail, unlocking up to £700 million in private sector investment and stimulating growth. 

 

“While there is still some way to go before the first new services can run, we stand ready to work with Virgin Trains as their plans develop." 

 

A Eurostar spokesperson said: “Eurostar acknowledges today’s decision from the Office of Rail and Road regarding capacity at Temple Mills depot.

 

“We are reviewing the decision and considering our next steps to ensure we can continue to grow.

 

“Our priority is to deliver for passengers the benefits of the investments in a new fleet, jobs and depot facilities that we recently announced.

 

“A full statement will be issued in due course.” 

 

American Express Global Business Travel executive vice president SME Jason Geall welcomed the news, describing the Channel Tunnel as a “critical business travel corridor” connecting the UK and European economies.

 

He said: ”Evidence from other countries shows that increased rail competition drives better service quality and more competitive pricing for travellers. 

 

"Eurostar currently makes up almost three quarters (74%) of business travel trips between the UK and France and one in five (21%) between the UK and Belgium - underlining the business value of Channel Tunnel link.

 

“Opening the Channel Tunnel to additional operators will help make rail an even more attractive option for business travellers on this vital route. 

 

"This could unlock significant benefits, including increased sustainability gains through shifts from air to rail, productivity improvements as business travellers can work effectively while in transit, and enhanced connectivity that supports both UK and EU economic growth. 

 

“We look forward to working with all operators serving this route to ensure that business travellers have access to the convenient, reliable, and competitively priced services they need.”