Richard Branson and the long battle to break Eurostar’s stranglehold

When Adrian Quine of Gemini Trains – one of the companies vying to break Eurostar’s stranglehold on cross-Channel rail – asked to see the London depot that Eurostar and its rivals would have to share, he noticed something odd. The huge grey-and-yellow building at Temple Mills near Stratford, the largest rail depot in London, was packed with trains, lined up in rows, empty and still. “It was the middle of the day, when you’d expect trains to be out on the network carrying passengers,” he says. “We found it full, though several of the trains had no apparent work going on.” When asked if he thought Eurostar had brought trains in from France to make it look like there was no room to spare, Quine replied that “taking on Eurostar has not been easy”. Shorts According to Eurostar, trains would have been present at the depot “because they were required to be there as part of normal operations.” Quine isn’t the only rail executive with skin in this game. Sir Richard Branson’s Virgin has also been fighting for access to Temple Mills – and in October won a coveted slot there, with Branson declaring he would “soon place an order for 12 state-of-the-art Avelia Stream trains” to deliver an “unmistakeably Virgin travel experience.” Nine months on, though, that order still hasn’t been placed. For more than three decades, Eurostar has had the Channel Tunnel passenger service to itself. It hasn’t done a bad job: its trains dominate the London-Paris and London-Brussels routes, taking roughly 80 per cent of the rail/air market. But since the high-speed line through Kent opened almost 20 years ago, things have stagnated. In 2007, there were 17 daily trains to Paris and 10 to Brussels. Today, those numbers are unchanged. True, five of the Brussels trains now continue to Amsterdam – but against that, since the pandemic, international services from Kent have been scrapped, along with trains to Calais and direct trains to the ski slopes, Disneyland Paris, and southern France. ‘Quite frankly dreadful’ Robert Sinclair, chief executive of London St Pancras Highspeed, the company that owns Eurostar’s London terminal, describes the passenger experience there as “quite frankly dreadful, in part because you’ve had a single operator there in a monopoly position.” The security lanes, he says, “do not work very well” and once through those you are “lucky” to find a seat. Eurostar did not respond to requests for comment on the claim it filled the depot with idle trains, or on Sinclair’s remarks on the service available to passengers. It’s also expensive. At the time of writing, for travel in a week’s time, the cheapest Eurostar single fare to Paris was £132. The cheapest direct air fare was £65. For travel in three months’ time, Eurostar was £53, versus air’s £35. High-speed rail was supposed to kill air travel. But at 24 flights a day, London-Paris is 41 per cent more frequent than the train, and it’s growing; Air France has just resumed flights from Gatwick, for the first time in about 30 years. Travellers at St Pancras station on 30 December last year when Eurostar services were halted amid problems with the power supply in the Channel Tunnel (Photo: Carlos Jasso/AFP) The rail minister, Lord Hendy, says: “We have seen substantial growth in demand for international rail in recent years. However, at the same time we have seen service provision contract. Competition will benefit users by expanding the number of stations served and promoting competitive prices.” Over the last 10 years, on high-speed rail routes across Europe, budget operators offering cheaper fares have sprung up to challenge incumbents. Eurostar plays this game too. Per mile, checked last week, its tickets between Brussels and Cologne, where it competes with Deutsche Bahn, were 30 to 50 per cent cheaper than its tickets between Brussels and London. True, the Chunnel route has far higher infrastructure charges than the airlines, or most other stretches of railway – including around £20 per passenger to pass through the tunnel alone. Even with this, though, Eurostar’s profit margin on cross-Channel services, just under 6 per cent, appears to be greater than the 4.1 per cent it makes on its intra-Continent service between France, Belgium, the Netherlands and Germany. Eurostar did not dispute the figures. Battle of the tracks On the ground, however, competition is arriving much more slowly than one of the company’s 190mph expresses. An EU directive mandating competitive operations on high-speed rail lines, the Channel Tunnel included, came as early as 2010. For the next decade, attempts to start new services foundered on Chunnel-specific safety rules. Trains had to be at least 375m in length, longer than standard European rolling stock, matching the distance between safety doors in the tunnel, so passengers could walk through the train to reach them in an emergency. This rule has now been relaxed. But when another potential rival firm, Evolyn, made its first request to see the Temple Mills depot in July 2023, it claims Eurostar didn’t reply for almost a year. Evolyn, Gemini and two others, Trenitalia and Virgin, then put in formal applications to the regulator, the Office of Rail and Road (ORR), to access Temple Mills, which Eurostar leases but does not own. It is the only facility in Britain on or near the high-speed route with room to service long cross-Channel trains. Two depots on the Continent are, for various reasons, unavailable. Sir Richard Branson’s Virgin won a victory in being afforded space in Temple Mills depot but are yet to move their trains in (Photo: Reuters/Amir Cohen) Temple Mills’s normal overnight storage capacity is 15 trains. The ORR found that Eurostar kept between six and 10 working trains there, with another track used to store decommissioned carriages for spare parts. There was enough room at the depot, the regulator concluded, for Eurostar and one rival. In October it chose Virgin for that slot. But this movie still has many reels to run. As Eurostar’s latest annual report says, “the ORR only approved access [to Temple Mills] for light maintenance activities, not heavy maintenance activities”. There is some spare space for heavy maintenance too, but not as much. Nine months after saying that it would do so “soon,” Virgin still hasn’t actually ordered any of its new trains, presumably because its investors aren’t yet certain it’s nailed down terms on where to put them. Eurostar, by contrast, has ordered 30 new trains. Most will only be used on the other side of the Channel, on its Paris-Brussels route – but it’s still talking about maintaining them all at Temple Mills, which might fill up that spare space Virgin is supposed to be using (Eurostar says Virgin’s ORR rights will be protected.) Some rivals also fear that the French state – which owns the majority stake in Eurostar – will somehow use access to the high-speed line in France to stymie potential rivals. The lumbering beast Virgin said that its cross-Channel plans “are moving at pace and we continue to make great progress.” At St Pancras, meanwhile, Sinclair has ideas for making more room – but many depend on the border authorities. And even if they say yes, the station, as much as the depot, will constrain significant expansion. For Gemini’s Adrian Quine, both St Pancras and Temple Mills are a busted flush. He wants to run trains from Stratford, whose international platforms have never been used, and Ebbsfleet, only about five miles from the M25. And for a depot he’s looking at brownfield new-build, a former British Rail site by the high-speed line in Ashford. Here, however, he’s at the mercy of a different lumbering beast, the Department for Transport, which has been studying depot capacity in the South-East for about two years and last year began a “market engagement exercise” on private-sector interest in financing new depot locations. “We can’t do anything until the DfT process is concluded, which should have been in the spring and is now not until the end of the year,” says Quine. “It’s extremely frustrating.” (Trenitalia, too, appears to have given up on Temple Mills, and is building a new depot in France.) The Temple Mills train depot in east London – the key to setting up a rival to Eurostar (Photo: Yelim Lee/AFP) The ORR said it had “enabled Virgin to break the deadlock with Eurostar over access to Temple Mills depot,” but “the next steps Virgin needs to take are predominantly outside of ORR’s remit.” Eurostar said it completely agreed that having “more operators encourages more people to choose rail. Competition and growth go hand in hand, but both require the right infrastructure, long-term investment and a regulatory framework that treats existing and new operators fairly.” Even if all the barriers can be cleared, we may still not see a Eurostar rival until as late as 2032, a mere 22 years after the line was formally opened to competition and nine years after the latest push began. The trains may be high-speed, but nothing else about this saga is.