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UK govt to sell Eurostar stake

Article By: ,  Financial Analyst
October 13, 2014 10:45 AM

The UK government is putting its 40 per cent stake in Eurostar up for sale.

Ministers are inviting buyers to bid for its share in the cross-Channel train operator to help improve public finances. The decision to sell the stake was put forward during last year's Autumn Statement and forms part of the government's National Infrastructure Plan. The latter initiative is designed to raise around £20 billion from corporate and financial asset sales by 2020.

Explaining the decision, chancellor George 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 (October 13th)."

While the government believes that sale of Eurostar will provide a significant boost to public finance, there has been concern from both Labour and the National Union of Rail, Maritime and Transport Workers (RMT).

RMT general secretary Mick Cash was concerned that the move would put more of the UK's railways into the hands of foreign owners. Mr Cash noted that France has first refusal on the UK's share of Eurostar and that both France and Belgium would consider Britain to be "insane" if they sold off such a "valuable and strategic infrastructure asset".

Launched in 1994, the Eurostar has provided a key passenger link between London and France and Belgium. Based at London's St Pancras station it allows holidaymakers or business customers to travel from the heart of the British capital to the centre of Paris and Brussels without the hassle of using an airport or ferry.

In July, Eurostar reported a two per cent increase in passenger numbers. In the first half of 2014, five million people had used the service, compared to 4.9 million recorded during the same period a year earlier. Sales revenues had also improved during the first six months of the year, growing 0.5 per cent to £456 million.

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