Private Investors Eye High-Speed Rail Competition from Geneva to London

The success of Eurostar in the lucrative Amsterdam-Paris-London corridor has attracted a surge of interest from various investor groups keen to challenge the established player. This burgeoning competition aims to drive down prices and expand high-speed train services across northwest Europe, but the complexities of the railway industry present significant hurdles.

Dutch entrepreneurs Roemer and Maarten van den Biggelaar, along with a partner, are launching Heuro, a new high-speed train service set to debut in 2028. Their initial route will connect Amsterdam and Paris via Brussels, with a planned extension to London. With prior experience in the internet, media, and perfume industries, the duo is well-versed in entrepreneurship but acknowledges the unique challenges of the railway sector, particularly the extensive regulatory landscape.

Eurostar currently enjoys a dominant position in the market, operating popular but often fully booked and expensive routes. For instance, a second-class ticket from Brussels to London can reach €250, exceeding the cost of air travel. Eurostar's dynamic pricing strategy, similar to airlines, contributes to these high fares.

Several other players are eager to enter the fray. Richard Branson's Virgin Group and the Evolyn project, a consortium of English and French businessmen, have also voiced their intentions to launch competing high-speed train services. While Virgin aims to secure funding by the end of 2024, Evolyn's plans remain uncertain following an unfinalized train purchase from Alstom.

Despite the enthusiasm, the railway industry presents substantial financial and logistical challenges. Rolling stock alone requires significant investment, with each high-speed train costing between €30 million and €60 million. Additionally, considerable capital is needed during the operational phase before profitability is achieved, a common stumbling block for private rail ventures in the EU. Infrastructure bottlenecks, such as the congested tunnel at Amsterdam's Schiphol Airport, further complicate matters.

However, key infrastructure players are actively supporting the liberalisation of rail transport in northwest Europe. Getlink, the operator of the Eurotunnel, is a vocal advocate for increased competition and has established a €50 million fund to back new rail services like those proposed by Heuro and Virgin. Getlink envisions direct train routes connecting London to cities like Frankfurt, Geneva, and Zurich, and has conducted market studies to assess the viability of such connections.

Swiss Federal Railways (SBB) is also exploring the potential of these connections, but a spokeswoman emphasised the considerable challenges involved and the cautious approach being taken.

While the prospect of expanded high-speed train services across northwest Europe is exciting, the complexities of the railway industry mean that realising this vision will require overcoming substantial financial, regulatory, and logistical hurdles. However, the growing interest from investors and the support of major infrastructure players indicate a promising future for high-speed rail in the region.