A 30-year contract to run the rail link between the Channel Tunnel and central London was sold to Borealis Infrastructure Management, the infrastructure investment arm of the C$50 billion (US$49.9 billion) Ontario Municipal Employees Retirement System, Toronto, and the C$96.4 billion Ontario Teachers' Pension Plan, Toronto.
The U.K government sold the concession to run the 68-mile High Speed 1 line for £2.1 billion (US$3.4 billion), U.K. Transport Secretary Philip Hammond said Friday in a statement.
The award is a setback for Groupe Eurotunnel SA, which runs the Channel Tunnel and bid with shareholders Goldman Sachs Group and Prudential PLC. Other offers came from Allianz, and 3i Infrastructure, teamed with Morgan Stanley's infrastructure unit and the $627 billion Abu Dhabi Investment Authority, according to people familiar with the auction.
Britain's coalition government is selling High Speed 1 through state-owned London & Continental Railways as part of an asset-disposal program aimed at paying down the country's £155 billion budget deficit.
“It's an enormous amount of money,” Mr. Hammond said. “It shows that the decisive action this government has taken to reduce the deficit is already paying dividends. Passengers will also benefit hugely as HS1 seeks to attract new services.”
High Speed 1 is currently used by Eurostar Group, which runs services from London St. Pancras to Paris and Brussels, as well as freight operators and Go-Ahead Group's Hitachi “Javelin” commuter trains.
The line makes about £250 million a year in access charges and has about 35% of its total capacity unused at present, enough to allow more operators to use the track.
Germany's state-owned Deutsche Bahn plans to run services via the tunnel by 2013 after the European Union introduced rules requiring track owners to grant access to new operators for cross-border high-speed trains.
The concession also includes the running of St. Pancras and terminals at Stratford, Ebbsfleet and Ashford, east of London.