London and Continental Railways

London and Continental Railways (LCR) is a property development company owned by the Government of the United Kingdom for developing former railway land. The company was originally established in 1994 as a private consortium to own European Passenger Services and build the Channel Tunnel Rail Link (CTRL) under a contract agreed with the government.

London & Continental Railways Limited
TypeLimited liability company
IndustryProperty development
Founded1994 (1994)
England, UK
OwnersDepartment for Transport

After the full length of the CTRL was opened and rebranded as High Speed 1 (HS1) in late 2007, the company subsequently ran into financial difficulties and was nationalised in June 2009.



LCR was established in 1994 during the privatisation of British Rail. LCR bid for and won the contract from the UK government in 1996 to build and operate the Channel Tunnel Rail Link between London and the Channel Tunnel, under the terms of the Channel Tunnel Rail Link Act 1996.[1] As part of this deal European Passenger Services (EPS) and Union Railways, companies owned by British Rail, were transferred to LCR ownership, as well as key pieces of railway infrastructure including St Pancras railway station and the King's Cross Central lands nearby.

EPS was the British arm of the joint Eurostar operation, along with SNCF in France and SNCB in Belgium. LCR renamed EPS as Eurostar (UK) Ltd (EUKL). Union Railways had been developing plans for the CTRL since before the opening of the Channel Tunnel and became the construction company of the CTRL under the ownership of LCR.

The original shareholders of LCR were Bechtel (19%), Warburg (19%), Virgin Group (18%), National Express (17.5%), SNCF (8.5%), London Electricity (8.5%), Arup (3.5%), Halcrow (3%) and Systra (3%).[2] As part of the 1996 contract, LCR was to finance and construct the CTRL itself, funding the project from income received from the Eurostar operation. LCR also planned to raise additional capital from a partial stock market flotation once the project was underway.[3]

Financial problemsEdit

In January 1998, LCR ran into major financial difficulties after finding that income from its share of the Eurostar operation was not at the level it expected. It blamed the lower level of passenger growth on disruption caused by a November 1996 fire in the Channel Tunnel and the growth of competing low-cost airlines. LCR's planned flotation, which had already been delayed, was aborted. With the entire CTRL project in doubt, LCR appealed to the British government for help.[4]

Government supportEdit

To enable the project to continue, LCR was allowed to issue £3.7bn of private bonds, which the government pledged to guarantee. In return the government gained a percentage of future profits from the operation of the CTRL once completed, as well as a golden share in LCR. As part of the deal LCR was forced to appoint a management contract for EUKL. This was won by Inter-Capital and Regional Rail (ICRR), a consortium of National Express (40%), SNCF (35%), SNCB (15%) and British Airways (10%). The contract was to run from 1998 until 2010.[5]

Following the access to finance, LCR was able to begin the CTRL project. Rail Link Engineering (RLE) was appointed to design and engineer the CTRL. RLE was a group made up of the four engineering companies involved in LCR; Bechtel (50%), Arup (19%), Halcrow (17%) and Systra (14%).[6] In addition, Railtrack was brought into the project by the government and agreed to purchase the CTRL from LCR once completed.

To reduce the risks surrounding the project, the construction was split into two phases. Section 1, from the Channel Tunnel to Fawkham Junction in Kent, was to be managed by Union Railways (South) under the control of Railtrack, who committed to purchase Section 1 from LCR once complete for the cost of its construction. The more complex part, Section 2 running from Fawkham Junction to London St Pancras was to be managed by Union Railways (North). Railtrack also purchased an option, to be exercised by 2003, to control Union Railways (North) during construction and acquire Section 2 once complete. It was intended that with the completed full-length CTRL then in Railtrack's future ownership, EUKL would then pay track access charges to use the line.

Railtrack crisisEdit

Following a series of rail accidents and a subsequent share price collapse, Railtrack announced in April 2001 that it would not take up its option to project manage and then purchase Section 2. Instead, Section 2 would be owned on completion by LCR, with Railtrack owning Section 1 as well as being responsible for operating both sections.[7]

In October 2001, Railtrack was placed into "railway administration" with debts of £7.1bn and in October 2002 Railtrack's assets were transferred to a newly created "not for dividend" company called Network Rail, whose debts would be guaranteed by the government. LCR re-purchased Railtrack's interest in Section 1 for £295m, meaning that both sections would once again be in LCR's ownership upon subsequent competition. Network Rail agreed to pay LCR £80m for the right to operate and maintain HS1 on LCR's behalf once complete.[8]

CTRL completionEdit

Section 1 of the Channel Tunnel Rail Link was completed in September 2003 and handed over by Union Railways (South) to London and Continental Railways. Eurostar services started using Section 1, leading to international journey reductions of approximately 20 minutes.

In March 2006, LCR shareholders rejected a takeover bid led by businessman Adrian Montague. Shortly afterwards, the Office for National Statistics reclassified LCR as a public corporation due to LCR's reliance on government funding and the resulting high levels of influence the government enjoyed over the company.[9]

The Channel Tunnel Railway Link was finally finished when Section 2 was completed and handed over by Union Railways (North) to LCR. In November 2007, the full length of the line was opened to the public, rebranded as High Speed 1 (HS1) with Eurostar trains operating international train services from St Pancras railway station, and a further 20-minute journey time reduction.


Following the Channel Tunnel Rail Link (Supplementary Provisions) Act 2008, the Department for Transport took direct ownership of LCR in June 2009 for a nominal price. This was possible due to the company's dependence on £5.1bn of government-guaranteed debt, and the government's special share in LCR giving it a wide range of control over the business.[10]

The government stated it planned to sell off LCR's assets, such as EUKL and HS1, as individual companies to recoup some of the large amounts of government money paid to LCR since 1998.[11]

Eurostar restructuringEdit

On 31 December 2009, EUKL was renamed Eurostar International Limited (EIL). On 1 September 2010, the three national Eurostar operators merged into a single company with a single management structure. Following this change, the ICRR management contract for the UK business was terminated.[12] All Eurostar assets were transferred to EIL, with LCR's holding in the new company becoming 40%. The remaining shares were held by SNCF (55%) and SNCB (5%).[13]

High Speed 1 concessionEdit

In November 2010, a 30-year concession to own and operate HS1 was sold to a Canadian consortium of Borealis Infrastructure and Ontario Teachers' Pension Plan for £2.1bn.[14]

BRB (Residuary) assetsEdit

Following the abolition of BRB (Residuary) Limited (BRBR) on 30 September 2013, LCR took ownership of a number of former British Rail offices in Croydon, Derby, Manchester and Birmingham, as well as sites in Oxford and Leeds. It also took over the management of the closed Waterloo International railway station and North Pole depot, on behalf of the Secretary of State for Transport. The remaining BRBR assets and responsibilities were split between the Highways Agency, Network Rail and the Rail Safety and Standards Board.[15]

Eurostar divestmentEdit

On 4 December 2013, the government announced that it intended to sell LCR's 40% stake in EIL.[16] In June 2014, the shareholding was transferred from LCR to HM Treasury[17] and the sale process was subsequently launched on 13 October 2014.[18] The sale was completed in March 2015, raising a grand total of £760 million.

Current operationsEdit

As of 2015, LCR is a state-owned railway property development company. It is involved in a number of regeneration projects on former railway land, including King's Cross Central, Stratford City and Manchester Mayfield. It also manages Waterloo International railway station and North Pole depot [needs update], as well as providing property advice to HS2 Limited.

In 2021, LCR plans to bring forward property developments on several railway sites in North West England.[19]

See alsoEdit


  1. ^ London & Continental wins Eurostar and Channel Tunnel Rail Link The Railway Magazine issue 1,141 May 1996 page 9
  2. ^ "Stakeholders London and Continental Railways". OMEGA Centre. Archived from the original on 23 December 2012. Retrieved 6 May 2012.
  3. ^ "LCR set to award contracts for rail link tunnels". The Independent. 3 January 1998.
  4. ^ "Shooting Star". Marketing Week. 5 March 1998. (subscription required)
  5. ^ "Memorandum by Inter-Capital and Regional Rail Ltd (RES 4)" (Press release). 20 November 1998.
  6. ^ "United Kingdom High Speed 1" (PDF). Systra.
  7. ^ "Railtrack share collapse continues". BBC News. 4 April 2001.
  8. ^ "Railtrack". The Guardian. 27 June 2002.
  9. ^ "Debt-laden Channel tunnel rail link is 'nationalised'". The Guardian. 21 February 2006.
  10. ^ Government acquires LCR Railway Gazette International July 2009 page 9
  11. ^ "London and Continental Railways Limited (Oral statement)" (Press release). Department for Transport. 8 June 2009. Archived from the original on 8 April 2010.
  12. ^ "Eurostar restructure sees UK expand rail stake". Archived from the original on 23 October 2013.
  13. ^ "Eurostar Ownership & Structure". Eurostar. Archived from the original on 8 May 2009. Retrieved 6 May 2012.
  14. ^ "£2.1bn HS1 sale lifts privatisation prospects". The Financial Times. 5 November 2010.
  15. ^ "LCR takes on BRBR properties". LCR. 30 September 2013.
  16. ^ "UK government revives infrastructure drive". The Financial Times. 4 December 2013.
  17. ^ "House of Commons Hansard Ministerial Statements for 19 June 2014 (pt 0001)". UK Parliament. House of Commons. Retrieved 3 October 2014.
  18. ^ "Eurostar rail stake touted for sale by UK government". BBC News. 13 October 2014.
  19. ^ "Place North West | LCR to start search for railway site developers". Place North West. 28 January 2021.

External linksEdit