Rail industry

HS1 owners consider sale after receiving offers

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Deal by Canada’s Borealis and Ontario Teachers is unlikely to affect day-to-day services on the high-speed line

HS1 owns and manages four stations on its route, including St Pancras in London.
HS1 owns and manages four stations on its route, including St Pancras in London. Photograph: Cate Gillon/Getty Images

The pension funds that own the company running Britain’s only high-speed railway, HS1, are considering a sale after receiving a number of offers.

The Canadian investors, Borealis and Ontario Teachers, have announced a strategic review of their ownership of HS1 Ltd, which operates and manages the line on a 30-year concession until 2040.

Any sale is not expected to affect the day-to-day operation of services on HS1, which has been performing in line with investors’ expectations.

HS1 is the 67-mile stretch of railway linking London to the Channel tunnel, on which both Eurostar and high-speed Southeastern services operate. Network Rail is subcontracted to manage the rail infrastructure, while HS1 owns and manages four of the stations on the route, with significant commercial income including retail at the flagship St Pancras International in London.

A source said neither Borealis or Teachers had been looking to sell but had been approached by a number of potential investors “kicking the tyres” of HS1. The review could end with no sale, or the sale of a stake, but the Canadian owners, while traditionally long-term investors, are assessing the scale of other potential interest.

Borealis and Teachers paid £2.1bn to the government for the concession in 2010. They also now own stakes in London City airport, as part of the consortium that bid in the £2bn takeover this year. Teachers has a HS1 share in Bristol and Birmingham airports, while Borealis is an investor in Associated British Ports.

HS1 is the UK’s only high-speed railway to date. Parliament is expected to fully ratify plans for the London-Birmingham first phase of HS2 early in 2017, and the government may yet look at a similar concession model for the rail infrastructure.

Significant interest in bidding for a rail line could boost the prospects of the planned line between Oxford and Cambridge, announced by the transport secretary, Chris Grayling, this week to be funded with private investment and operated separately from the rest of the network.

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