“We have been lobbying quite hard, as have Eurostar, as have SNCF, to say can we do the pre-registration away from the station? But all the indicators are that it’s going to be done at the station.
“So, I’m going to end up with two queues. Eurostar have done some modelling that says you are increasing the queue time, the processing time, to two minutes in total. Plus, you’re going to be running two queues which gives us operational issues, which then means for Eurostar to load a train and the way we flight trains at the moment to match the international timetable, we can probably only get a third of the people onto the train that we need to.”
A Eurostar Class 374 train can seat 894 passengers. At two minutes per passenger, passport checks will take 1,788 minutes, which when spread across Crowther’s planned 24 desks would take 74.5 minutes. If Eurostar were to run an hourly service to each of Paris and Brussels, it’s easy to see that St Pancras does not have the space to cope.
At two minutes per passenger, those 24 desks can deal with 720 passengers per hour. With two trains per hour, that implies 360 passengers per train. Or roughly 40% of the capacity of a ‘374’, which supports Crowther’s ‘one-third’ contention.
Even in normal times, that’s not economic. But Eurostar is not in normal times. It’s an open access operator, so did not receive government support during the pandemic.
In his letter to UK MPs, Damas set out the cold, hard facts of the pandemic’s impact: “We had our revenues cut by 95% for 15 months in 2020-21 and were hit hard by the Omicron wave in December 2021 and early 2022, the restrictions attached to which had a further impact of at least £50 million.
“Contrary to the £7 billion in state aid given to our airline competitors - many of whom also have overseas and state-backed shareholdings - Eurostar did not receive any state-backed loans. Our shareholders put a further £250m into the business (almost double the total historic amount ever taken out in dividends), but Eurostar needed to find an additional £500m in commercial debt in order to survive.
“This commercial debt is at considerably higher cost than the loan facility offered to the airlines and Eurostar must continue to meet the demanding financial ratios underpinning these loans.”
That’s not a situation into which half-filled trains play well. The company’s other option is to run fewer trains, but this comes up against another problem. That problem is that HS1 has the right to recover its costs and investment. It does this by charging train operators access charges. Fewer trains translates into higher charges per train, which will doubtless filter through to higher fares. And raising fares will push passengers back towards airlines. So too will a less-frequent timetable.
The obvious response is to cut HS1’s costs, and RailReview put this to Crowther. She responds: “We’ve done a lot already. We looked at the overall cost base of HS1 - be it the costs of having HS1, be it pass-through cost. So, we’ve shaken down insurance costs, we’ve challenged business rates, all of which are pass-through costs to the train operators. We’ve done a huge amount of work on our energy costs where we’ve been on the front foot, hedging how we do things. We’ve signed private purchase agreements with energy providers.
“All of that has kind of kept costs down for train operators. Or damage limitation in terms of the environment we’re in at the moment. We’ve taken £2m out of stations as well, mainly by challenging contracts, looking at specifications - and, again, this goes back to a lot of the work we were doing during the pandemic to reduce the cost base.”
Crowther continues: “We’ve had a long, hard look at some of our main contractors, the main one being Network Rail High Speed, and we’re just going into our next periodic review. We signed a revised agreement with Network Rail that enabled them to put more efficiencies on the table. So, we’ve got a broader range of efficiencies.
“We have a long-term relationship with Network Rail High Speed, and what we weren’t doing was leveraging that. Both sides were almost circling each other with handbags going, ‘Well, you go first, then I’ll go’. We just needed to get rid of that and put the customer at the forefront of what we do, because if we don’t have customers, we don’t have businesses.
“Now we’re looking at the long-term relationship and how we can push through efficiencies and productivity measures that can be passed on to the train operator. Because I’ve got the right to recover all of my costs, if that cost base is lower, it’s good news for the train operator. I don’t gain anything by charging more or charging less, so there’s no net gain or loss for me other than the strategic view of keeping the operators.”
This work has led to NR (HS) hitting its efficiency target of just under 10%. It has also put another 7.5% of efficiencies on the table for the next periodic review, which will take effect from 2025.
There’s a balance between costs and resilience, but talks with train operators have allowed it to cut some further costs.
Crowther explains: “We have a lot of feeder stations that give redundancy and protect service. So, we’ve got agreement from our train operators that we’re going to turn off one of those feeder stations. That will save them £1.2m per annum.
“What we’ve tried to do is give customers options and say the trade-off here is that you can save this much, but you’ve got a little bit less resilience, but the risk is quite low. It’s then down to them to make that decision. That’s another example of what we’ve done to really look at the ops and maintenance costs.”
HS1’s track access charges are both similar and different to those levied by Network Rail on domestic operators.
In the ‘similar’ category come the costs of operating and maintaining the network, although HS1 charges by the timetabled minute to encourage high-speed operation.
