LONDON - The Office of Rail and Road (ORR) today mandated HS1 Ltd to reduce the charges it levies on train operators for the use of the high-speed railway connecting London to the Channel Tunnel, effective from April 2025. The directive follows a comprehensive review of HS1 Ltd's spending plans for the next five years, which the regulator found did not fully align with its efficiency requirements.
In its final determination, the ORR concluded that HS1 Ltd should decrease overall charges by 3.8% or £5 million annually compared to the company's most recent proposals. These proposals, issued in November as a response to the ORR's draft determination in September, included some cost reductions but were deemed insufficient by the regulator.
Specifically, HS1 Ltd is instructed to cut the costs associated with renewing track assets and stations, including the prominent St Pancras International, as well as daily operating and maintenance expenses. According to the ORR, better asset management can lead to reduced charges, ultimately benefiting the railway's customers.
Feras Alshaker, Director of Planning and Performance at the ORR, stated, "Our thorough, independent review of HS1 Ltd's spending plans has resulted in significantly lower costs for passenger and freight train operators using the high-speed line from April 2025."
The ORR's review identified inefficiencies in HS1 Ltd's plans, particularly in renewal charges for the HS1 Route and stations, along with operations and maintenance costs. These areas are now subject to reductions of £1.9 million and £0.9 million per year for route and stations renewals, respectively, and £2.3 million per year for route operations and maintenance.
The regulator's decision also assumes no freight traffic on the HS1 line for the upcoming control period, based on current data. However, ORR has established lower charges for potential freight traffic, which may encourage growth in this area. Additionally, the determination anticipates an increase in passenger traffic, including new operators, with the expectation that lower charges will support this expansion.
This decision is part of the periodic review process, covering the period from April 1, 2025, to March 31, 2030, known as control period four (CP4). After a draft determination and a consultation period, stakeholders provided feedback that largely supported the ORR's approach, although HS1 Ltd's revised plans did not fully meet the regulator's expectations.
The HS1 network, a 109-kilometer high-speed rail line, serves domestic and international passengers, including Southeastern 'Javelin' services and Eurostar trains, as well as freight operations. The line includes four stations: London St Pancras, Stratford International, Ebbsfleet International, and Ashford (NYSE:AINC) International.
This article is based on a press release statement from the Office of Rail and Road.
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