HS1 COVID-19 Update

Update in relation to COVID-19

The COVID-19 outbreak has affected the UK and global transport sector and caused an unprecedented impact on the UK and global economy. HS1 Limited (“HS1”) is not immune to this impact.

HS1 has a well-understood concession model with underpinned domestic track access paths, supported by RPI-linked revenue swaps to give certainty in respect of inflation-growth. The key customers of HS1 including Eurostar (majority-owned by SNCF) and LSER (the franchisee of domestic services) are required to pre-pay the majority of access charges to HS1. We are in regular contact with our train operators and the Department for Transport, and are keeping our rights and obligations to all counterparties under close review. Reductions in the volume of passengers travelling on High Speed 1 are likely to adversely impact all train operators.

The Department for Transport announced on Monday, 23 March 2020, that it would temporarily end normal franchise agreements and transfer all revenue and cost risk to the government for at least half a year, with train operators to continue running services day-to-day for a small management fee under an “emergency measures agreement” to enable the movement of key workers and freight. HS1 is keeping the announcement of these temporary measures and this fast-evolving situation under review as it awaits further details from the Department for Transport on the impact of this announcement on the business of HS1.  

Our obligations and responsibilities under the Concession Agreement to operate and maintain High Speed 1 are sub-contracted to NR(HS) (Network Rail). We are in regular contact with NR(HS). We keep under continuing review potential causes of disruption including insufficient operational NR(HS) staff or closures of the High Speed 1 infrastructure, if any, that could make High Speed 1 unavailable and so prevent or restrict the operation of rail services.

HS1 also receives non-regulated revenues (from sources such as retail, car-parking and advertising) which may be adversely affected by the COVID -19 outbreak. We are closely monitoring the situation in this area of our business as well. 

HS1 will provide an update of its strategic response to its stakeholders and creditors in due course in this fast-evolving situation.