Canadian funds win Channel Tunnel link

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The Independent Online

A consortium of Canadian pension funds has won the auction to run the railway link between London and the Channel Tunnel for the next 30 years.

Borealis Infrastructure, an arm of the Ontario Municipal Employees Retirement System (OMERS), and the Ontario Teachers' Pension Plan will pay £2.1bn for the High Speed 1 (HS1) route, which is used by Eurostar trains to Paris, Brussels and other European cities. The sale of the 68-mile line is part of a Government disposal programme to aid the reduction of Britain's bulging budget deficit.

The Transport Secretary, Philip Hammond, said the deal was "great news for taxpayers and rail passengers alike". "It is an enormous amount of money and is a big vote of confidence in UK plc and a big vote of market confidence in the future of UK high speed rail," he said.

"It also shows that the decisive action this Government has taken to reduce the deficit is already paying dividends," Mr Hammond added.

The consortium will begin running the line following completion later this month. Besides the route, the new owners will also be responsible for running St Pancras International and the international stations at Stratford, Ashford and Ebbsfleet. In addition to Eurostar services, the line is currently used for domestic high speed services between London and Kent.

The Government kicked off the competition for HS1 in June, with state-owned London and Continental Railways (LCR) managing the sale. The Swiss investment bank UBS advised LCR, while Citi advised the Department for Transport.

The new owners are among Canada's biggest pension funds. OMERS has approximately C$48bn (£29bn) in net assets, with its Borealis arm boasting investments of more than C$17bn spread across 20 businesses, including Associated British Ports and Scotia Gas Networks in the UK.

The Ontario Teachers' Pension Plan is the biggest single-profession pension plan in the country, with more than C$96bn in assets at the end of last year. Besides this foray into high speed rail, it has a number of investments in the UK, including Camelot Group, Bristol International Airport and Birmingham Airport.

The performance of the new operators of HS1 will be policed by the Office of Rail Regulation.

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