HS1 Ltd, which has a 30-year concession to operate the 108km high-speed line linking London St Pancras with the Channel Tunnel, had requested a hefty increase to fund infrastructure renewals, which would have resulted in charges for international passenger services increasing by 43%, with domestic passenger services subject to a 25% rise. Freight tariffs would have increased by 74% from £7.54 per train-km to £13.10 per train-km.
ORR says that its ruling will result in train operators collectively paying £25.9 million per year towards the long-term cost of maintaining assets in good condition. As a result, the increase in track access charges will now be around 19% for international passenger services, 16% for domestic passenger services and 12% for freight. These increases are still way ahead of the rate of inflation, but a lot less than HS1 requested.
ORR says that total operating and maintenance costs should be £363.5m for Control Period 3 (CP3), which runs from 2020 to 2024, which is marginally higher than HS1 Ltd originally proposed in May 2019, while the annual renewals charge should be £25.9m, which is £12.3m lower than HS1 Ltd originally proposed.
“While we have approved the majority of HS1 Ltd’s proposals we have also determined some aspects of how the asset should be managed,” ORR says. “These include reviewing the approach to asset life and project management costs. Given the increase in funding HS1 Ltd will receive and the expected ramp-up in work to renew the railway, we will be reviewing and heightening our monitoring and reporting of HS1 Ltd’s progress to ensure that the plan is delivered well and at good value.”
“HS1 is a valuable public asset and our role is to provide independent assurance that the line will be kept in good condition over the long-term at the lowest possible cost,” says ORR’s CEO Mr John Larkinson. “This is important to make sure that train operators and, in turn, passengers and freight users get a good deal now but not at the expense of future generations.”