Sir Richard Branson’s Virgin Group is preparing an order for a dozen high-speed trains as it bids to break Eurostar’s monopoly on services through the Channel Tunnel.
Virgin aims to sign a contract for the trains before March to get ahead of startup Evolyn, which is also putting together plans to run trains from London to the continent.
Project lead Phil Whittingham said Virgin will choose between two suppliers it has shortlisted and is evaluating models from Alstom, Siemens, Hitachi and Talgo. The order is likely to be worth more than £500m, based on the value of recent deals for similar rolling stock.
Virgin aims to commence services through the Channel Tunnel in 2029, with the project requiring close to £1bn in launch funding, Mr Whittingham said. Sir Richard will take as big an equity stake as possible, potentially supported by a partner or partners.
It comes as operators gear up to run services to the Continent in competition with Eurostar for the first time in its history. Evolyn, which is backed by the Spanish Cosmen family, the leading investor in Mobico, formerly National Express, is also planning to run trains along the route.
Virgin is in a race against Evolyn to secure trains for the route, with doubts as to whether it will be able to accommodate three operators.
The Office of Rail and Road (ORR) is to rule on whether Britain has sufficient maintenance capacity to support an expansion of operations through the tunnel. The ORR will decide whether Temple Mills maintenance depot in east London can handle the required number of new high-speed trains such competition would provide.
Eurostar has pushed back against applications from Virgin and Evolyn to use Temple Mills, arguing that the depot is already working flat out on its own trains.
Mr Whittingham said that while he is confident the rail regulator will conclude that there is space at Temple Mills for a single new entrant, it is unlikely to be persuaded of the business case for two new players.
He said: “We don’t believe there is room for three operators on the route. We don’t think the economics would work for three operators competing.”
Virgin aims to be ready to purchase the trains as soon as the ORR has delivered a verdict.
He said: “We’re hoping the regulator will determine what capacity is available and reserve it for a new competitor. And we expect the first person to come along with a contract for new trains will get that capacity.”
Evolyn announced in 2023 that it had agreed terms to buy 12 trains from Alstom. Alstom later said no contract had been signed and that it couldn’t guarantee delivery dates.
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A Eurostar spokesman said: “The essential issue we face is not Eurostar trying to restrict access but the fact that there is already limited space available at St Pancras and Temple Mills to meet the combined growth ambitions of everyone.
“We have recently written to the new Government asking for its support in creating a framework that will enable all operators, including Eurostar, to invest on level terms in the further network expansion we all want to see.”
The ORR has appointed an independent specialist to undertake a study of available capacity at Temple Mills, with the assessment expected to be completed this month.
The regulator last week instructed HS1, which runs the UK section of the Channel Tunnel line, to cut access fees by 10pc to encourage competition.
The step will reduce annual charges by £5m more than HS1 had already promised, though Mr Whittingham said the route will remain expensive.