French meet their Waterloo over Eurostar

FRANCE'S STATE-owned railway may have met its Waterloo. SNCF and the Belgian state operator SNCB are surrendering key functions in the running of Eurostar, the international passenger rail service, to a new company based at the London train station named after Wellington's famous military victory.

Eurostar Group will be run by a board of directors from the three operating railways, and headed by Hamish Taylor, the managing director of Eurostar (UK), who will become its chief executive.

The group said the catalyst for the move had been the award of the management contract for Eurostar (UK), the private sector British operating arm, to Inter-Capital and Regional Rail (ICRR), a consortium of SNCF, SNCB, British Airways and National Express.

Last week Eurostar said it had increased revenues by 29 per cent in 1998 following a cost-cutting programme and better marketing.

Mr Taylor said: "If we wish to continue this excellent progress we must remove the internal barriers that operating as three separate companies inevitably create."

Eurostar Group said the new structure would allow greater efficiencies, faster decision making and would eliminate duplication - or even triplication - of activities and costs.

Under the new system, a number of key functions - commercial, budgets, co-ordination, corporate communications, legal services and IT systems - will be run from Waterloo on behalf of the three railways. But production, ancillary revenue, sales and personnel will remain the domains of each company.

David Azema, the chairman of Eurostar Group, said: "It will not be dominated by any of the three countries involved but presents an opportunity to enhance this cosmopolitan experience and create a unique public/private sector, pan-European business model."

Eurostar (UK) last week announced it had cut its annual losses from pounds 135m to pounds 90m and forecast it would break even on target in 2005, five years before the ICRR franchise expires.