Richard Branson’s train company is a step closer to challenging Eurostar’s monopoly on transporting passengers across the Channel after the UK rail regulator approved Virgin Trains’ application to use a key depot in east London.
The Office of Rail and Road (ORR) approved the application to use the Temple Mills depot in Leyton, which is used for maintaining and storing trains. It said this would unlock £700m of investment in new services and create 400 jobs.
Access to Temple Mills is a critical step in helping Virgin Trains challenge the monopoly held by Eurostar, which has been the only passenger service allowed to access the Channel tunnel since it opened in 1994. Temple Mills is the only train depot that can be accessed from High Speed 1, the line that runs between London and the tunnel.
The depot will give Virgin trains access to the light maintenance facilities it needs to run international services to the European mainland. While Virgin still needs to secure additional regulatory approvals covering issues such as track access and safety, regulatory approval brings Branson one step closer to launching his plan to run services competing with Eurostar in 2030.
The billionaire entrepreneur said: “The ORR’s decision is the right one for consumers – it’s time to end this 30-year monopoly and bring some Virgin magic to the cross-Channel route.
“Virgin is no stranger to delivering award-winning rail services, and just as we have successfully challenged incumbents in air, cruise and rail, we’re ready to do it again. We’re going to shake up the cross-Channel route for good and give consumers the choice they deserve.”
Eurostar currently runs trains from London’s St Pancras station to locations such as Paris, Brussels and Amsterdam.
The tunnel is used at only about 50% capacity, despite also accommodating LeShuttle vehicle-carrying trains between Folkestone in Kent and Calais in northern France.
Virgin Trains plans to run services between St Pancras and the same stations in Paris, Brussels and Amsterdam used by Eurostar, as well as to expand “further across France, and into Germany and Switzerland”.
The ORR’s decision comes only months after it rejected a separate application to return Virgin trains to the UK’s west coast mainline, amid concerns over delays and cancelled journeys. Virgin Group has not operated trains in the UK since its contract for the west coast mainline expired in December 2019.
Commenting on the Temple Mills approval, Martin Jones, ORR’s deputy director of access and international, said: “With this decision we are backing customer choice and competition in international rail, unlocking up to £700m in private sector investment and stimulating growth.
“While there is still some way to go before the first new services can run, we stand ready to work with Virgin Trains as their plans develop.”
This month Eurostar said it would start running doubledecker trains through the Channel tunnel to meet growing demand for international rail travel from the UK.
Responding to Virgin’s successful application, Eurostar said: “We are reviewing the decision and considering our next steps to ensure we can continue to grow. Our priority is to deliver for passengers the benefits of the investments in a new fleet, jobs and depot facilities that we recently announced.”
Virgin Group will lead the funding of the operating company, alongside the infrastructure investor Equitix and the private equity firm Azzurra Capital.
The ORR rejected applications from Virgin’s rivals Evolyn, Gemini Trains and Trenitalia, to use the Temple Mills depot.
The rail minister, Peter Hendy, welcomed the ORR’s approval of Virgin’s application, but said that “while this decision is an important first step, we recognise there is significant interest in this and depot capacity should not be a barrier to greater competition and growth.
“We are therefore exploring plans to establish new depot capacity in the UK, supported by private investment, to meet the needs of the market and will set out further plans in due course.”
He added: “We will also continue to champion the reopening of Ashford and Ebbsfleet International stations as a priority to restore full connectivity, support tourism and boost growth across the region.”
