Channel-Train Operator Eurostar Wins EU Approval of Joint Ownership Plan

Eurostar Group Ltd., the operator of high-speed trains through the Channel Tunnel, won conditional approval from the European Union to adopt a single-company structure aimed at helping it compete with new market entrants.

The reshaping of Eurostar, which runs trains from London to Paris and Brussels, was cleared on condition that other rail operators be given access to station facilities at either end of the tunnel, the European Commission said today in a statement.

The original deal could have made market entry for competitors “more difficult, and might therefore perpetuate Eurostar’s dominant position,” the commission said.

Under the revamp Eurostar will be jointly controlled by French state rail operator Societe Nationale des Chemins de fer Français and the U.K.’s London & Continental Railways Ltd. Eurostar has said the switch will enable a “cohesive structure” in a more competitive environment.

Eurostar spokeswoman Mary Walsh said the company welcomed the EU approval and its agreed conditions. “We’ve been competing against the airlines for the last 15 years so we’re used to competition,” she said in a phone interview.

Eurostar is bracing for competition on the Channel Tunnel route as companies including Germany’s state-owned Deutsche Bahn AG seek access after the European Union opened cross-border rail to competition from Jan. 1. The company is also restructuring after winter breakdowns stranded 2,000 passengers in the 30-mile (48-kilometer) and left 90,000 more waiting at stations.

The owners, who plan to rename the company Eurostar International, offered antitrust commitments to help secure approval for the revamp, regulators said last month.

‘Infrastructure Charges’

“In order to be able to supply alternative services, it is important that incumbents and new operators have access to the existing infrastructure, of course by paying infrastructure charges,” the commission said today.

That would include ticket counters and passenger information, it said, while Eurostar will also have to release some pathways to new operators if they’re unable to obtain them through the normal allocation procedures.

Eurostar is currently a venture of SNCF, the Eurostar U.K. Ltd. unit of London & Continental and Belgium’s Societe Nationale des Chemins de fer Belge, which have signed framework agreements on the overhaul.

The restructuring will ease the way for a possible sale of the British holding in Eurostar after London & Continental was taken into government ownership in 2009. The company also owns High Speed 1, the U.K. section of the Eurostar route which may also be sold as Prime Minister David Cameron seeks to cut debt.

To contact the reporter on this story: Christopher Jasper at cjasper@bloomberg.net

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