Eurostar to buy German trains as it gears up for expansion

Eurostar international is ordering 10 new high-speed trains for the Channel Tunnel rail link from the German industrial giant Siemens, in the teeth of pressure from the French government to buy from France's Alstom.

In a move to capitalise on growing demand for short-haul European travel, Eurostar International is undertaking a £700m capital investment programme, including "the complete overhaul and refurbishment" of its 27-strong fleet, as well as the purchase of 10 Velaro-D trains from Siemens.

There is no formal price tag because the terms are yet to be finalised. But analysts expect the deal to be worth some €600m (£520m).

The Velaro-Ds will be able to carry more than 900 passengers, 20 per cent more than existing Eurostar trains. With a maximum speed of 200mph, compared with 186mph on the current fleet, the journey from London to Paris will be just over two hours.

The new rolling stock, due in 2014, will enable direct services to Amsterdam in just over four hours and Geneva in around five.

Nicolas Petrovic, the chief executive of Eurostar, said: "Eurostar has revolutionised travel between London, Paris and Brussels but our sights are now set on expanding our business across Europe."

Both the upgraded Eurostar fleet and the new trains will be designed by Italy's Pininfarina, which is known for its collaborations with Ferrari and Rolls-Royce. The specification "draws on extensive passenger feedback and includes a number of innovative features", including Wi-Fi and on-board video-on-demand, Eurostar said.

Until last month, Eurostar was a partnership between three railway companies: France's SNCF, Belgium's SNCB and Britain's LCR. But on 1 September it because a single corporate entity owned by the three companies as shareholders.

At the unveiling of a showcase of the new train in Hyde Park in London yesterday, the Transport Secretary, Philip Hammond, said: "The transformation of Eurostar into a single entity has created a company well-placed to attract the resources and investment needed to deliver a world-class service. That's good news for passengers but also for the UK taxpayer as well, who owns 40 per cent of Eurostar International."

But the fact that Eurostar's new rolling stock will be bought from Siemens rather than Alstom is causing consternation in Paris, where Alstom is considered a national industrial champion and was rescued from collapse by Nicolas Sarkozy, then the country's Economy Minister, in 2004.

Siemens' Velaro-D and Alstom's AGV are Europe's major rivals in the high-speed train business. And the French government has been ratcheting up the pressure on state-backed SNCF in an effort to derail the Siemens deal. Tactics reportedly include calling for a reversal of changes in safety procedures in the tunnel which would rule out the "distributed traction" technology used in the German trains.

Eurostar's capital investment programme comes as European governments are looking to trains as a greener option to air travel. To boost competition, the continental market is being liberalised and a test run by Germany's Deutsche Bahn this month will be the first non-Eurostar train through the Channel Tunnel.