UK seeks private partners for Heathrow rail link

The government is planning to extend transport links without spending taxpayer's money, with private companies invited to fund, finance and build the new Heathrow link. The £1.6bn development is expected to link South London with Heathrow Airport, with a new 10 mile track.

The Department of Transport is currently seeking a development partner for the work, which will provide a critical link between Britain's busiest airport and Waterloo Station with lines to Woking and Guildford. Heathrow currently has no direct rail links to the south of the UK.

The selection of a development partner is expected to be complete by summer 2021.

Private sector investment

The £1.6bn price tag is expected to be picked up by the private sector. The outlay would be recouped by charging train operators for access. The rail link was first proposed in 2016 by startup Heathrow Southern Railway, who are vying to land the contract. Chris Stokes, chief executive of HSR, said not a penny of public investment would be involved in the project.

Stokes said there was a strong enough business case to build the new rail link using exclusively private money. It would be privately financed and user funded without relying on premium fares, which Stokes added was 'probably unique' for a recent rail project. HSR believes that the operating profits would be enough to provide a full return on the capital cost.

Private pipeline

Investors have typically been wary of taking on construction costs, but around half the government's infrastructure pipeline will be paid for by the private sector. HSR has sought a usage undertaking form the government to guarantee a minimum number of trains operating on the line.

HSR believes that the need for the link means it will have no difficulty in reaching its target figure of 33,000 passengers per day. Although the pandemic has affected the number of international travellers passing through Heathrow, Stokes and HSR believe that normal service will quickly be resumed and are currently being backed by investors and engineering consultancy Aecom.

Infrastructure experts have preached caution, pointing out that few passenger railway projects - including the Heathrow Express Line with some of the most expensive fares per mile in Europe - have managed to cover their operating costs solely through fares.

Copper bottomed guarantees from the government on minimum usage should help the project to approve bankable to prospective investors.

Keeping the railways running

Infrastructure projects like HS2 are central to the government's targets to reach net-zero carbon emissions by 2050. The HSR link would fit with that commitment by transferring another 3m journeys from road to rail.

Billions have been poured into keeping the railways running throughout lockdown and the government have underwritten losses suffered by operators as passenger numbers have collapsed. Some of this has been clawed back through savings, including a £1bn cut on funding for future railway infrastructure upgrades.

Other infrastructure schemes have been put on hold including Crossrail 2 and the Bakerloo line extension to Lewisham. But a privately funded link between Heathrow and the south could be a blueprint for future infrastructure developments.