Eurostar Chief Reviews Amsterdam Route Plans on Dutch Track Fees

Eurostar Group Ltd. said it’s reviewing plans to operate trains from London to Amsterdam in the light of Dutch track access charges.

The 10 new e320 trains that Eurostar has ordered at a cost of 700 million pounds ($1.1 billion) could instead be deployed on existing routes to Paris and Brussels or to southern France, Chief Executive Officer Nicolas Petrovic said in an interview.

The first two e320s have begun trials with manufacturer Siemens AG (SIE), and deliveries to Eurostar should start in mid-2014, he said. Further testing through the Channel Tunnel may take another year before the model enters service in 2015.

“Amsterdam is a big market but we haven’t taken a decision yet on where the trains will go,” Petrovic said today in London. “The landscape in the Netherlands is different in terms of the track charges, with the high-speed line run by a consortium. So we might go for more frequencies elsewhere instead.”

Charges for using the HSL-Zuid line between Amsterdam and the Belgian border are set by NS Hispeed, in which Dutch state railway Nederlandse Spoorwegen holds a 90 percent stake, with Air France-KLM Group’s Dutch unit holding the rest. Mieke Bosman, an external spokeswoman for NS Hispeed, said she couldn’t immediately comment on Petrovic’s remarks.

NS Hispeed pays fees to the government, which in turn funds a 25-year upkeep contract held by Infraspeed BV, in which the leading investors are Fluor Corp. of the U.S. and Bunnik, Netherlands-based Royal BAM Group NV. (BAMNB)
German Option

The possibility of using the new trains to add a route from London to Cologne may depend on whether German state railway company Deutsche Bahn AG gets a rival service up and running first, Petrovic said. That’s likely to happen in late 2015, Eurostar said, citing comments from the Berlin-based company.

The e320s, based on the Siemens Velaro D model, will run at speeds of up to 320 kilometers an hour (198 mph) and seat 900 people, 150 more than Eurostar’s existing fleet from Alstom SA (ALO), which will be revamped to a design from Italy’s Pininfarina SpA.

Eurostar will begin serving Lyon this year using its current fleet. The weekly service starting in May will allow people to reach France’s second-largest city from Britain without stopping in Paris, with trains carrying on to Avignon and Aix-en-Provence. An existing service to Avignon that runs in July and August will continue to operate.
Second Ski Train

A Swiss “ski special” — following on from a long-standing route to St Mortiz and the French Alps — will run until April 13, Eurostar said. The train, which was introduced in December, serves Verbier, Zermatt, Saas Fee and Gstaad, with passengers taking the Eurostar to Lille and changing to TGV Lyria trains run by a venture of the French and Swiss state rail operators.

The cooperation is “working very well” and could be extended to provide trains to Zurich, another city that Eurostar had said might be served by the e320s, according to Petrovic.

Eurostar doubled its operating profit to 52.3 million pounds last year, aided by a 2 percent increase in the passenger count to 9.9 million. Gains were aided by “non-glamorous” backroom cost cuts that became possible when the company ceased to be a three-way venture, Petrovic said.

Earnings were buoyed by a strong fourth quarter, when leisure traffic rose as Britons who had delayed taking time off during the London Olympics went on vacation. Numbers that were depressed before the Games also rose during the event itself.
City Boost

Business traffic from the City of London has begun to rebound, according to the CEO, after suffering a slump at the height of the euro crisis between the summers of 2011 and 2012.

“We communicate with corporate customers all the time and they were only talking about how hard things were,” Petrovic said. “Then after the summer they began to speak about looking for new business and a little bit of M&A coming back.”

Eurostar has also seen a surge in custom from passenger from outside the European Union as people use the train to travel between cities in different countries during their vacation, especially Brazil, the U.S. and Australia, he said.

There’s also huge potential from China, with visa restrictions currently damping the number of tourists who make the journey from Paris to Britain, the CEO said.


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