LONDON (Reuters) - Britain has begun the sale of the rights to operate the country’s only high-speed railway, transport minister Philip Hammond said on Monday, helping raise much-needed funds for the public purse.
The sale of the 110-km High Speed 1 (HS1) line, which links central London to the Channel Tunnel, will be the first major transport infrastructure sale since airport operator BAA sold Gatwick airport late last year.
The government, which has made tackling a budget deficit running close to 11 percent of national output its top priority, said the successful bidder would become the owner of HS1 Ltd, which has a 30-year concession to run the line and stations.
People familiar with the matter said the disposal of the line, currently run by state-owned London and Continental Railways, could fetch 1.5 billion pounds ($2.23 billion).
“The money generated by this sale will make an early significant contribution to the crucial task of reducing the public sector debt,” Hammond said. “But the sale will also bring benefits to passengers as the successful private bidder will be incentivised to attract new operators serving new routes.”
“The Government does not have to run everything directly, we need to take prompt action where private enterprise can provide both a better deal and a superior service to the public.”
The line also serves Stratford in east London and Ebbsfleet and Ashford in Kent.
Channel tunnel operator Groupe Eurotunnel SA is working on a bid with Goldman Sachs Infrastructure Partners, its biggest shareholder, and with Infracapital, the infrastructure arm of Prudential unit M&G, another big shareholder.
People familiar with the matter said other possible bidders could include funds such as 3i Infrastructure Plc; Deutsche Bank’s RREEF unit; Morgan Stanley Infrastructure; and Borealis Infrastructure, a unit of Canadian pension plan Ontario Municipal Employees Retirement System (OMERS).
None of the funds would comment.
France’s SNCF and Deutsche Bahn AG are both experienced high-speed rail operators and may also be interested, the people said.
HS1 Ltd will be independently policed by the Office of Rail Regulation to ensure that rail passengers’ interests are effectively safeguarded, Hammond said. Bidders have until July 9 to complete a “pre-qualification questionnaire.”
$1 = 0.6743 pound Reporting by Quentin Webb and Kylie MacLellan; Editing by Jon Loades-Carter and Simon Jessop