Government resists Eurostar bailout calls despite £ 400million debt

The government has resisted calls for a bailout from cross-Channel rail operator Eurostar, despite the company on the brink of bankruptcy.

Eurostar has until June to repay the £ 400million loans it took out to support a collapse in revenues after passenger numbers plummeted during the pandemic.

Chancellor Rishi Sunak unveiled a program called Project Birch last year to help strategically important companies that “have exhausted all options.”

However, ministers appear to be taking a strong stance on the issue, with critics insisting that the deadline to write off the debt can be extended.

“The tunnel and the rolling stock are there. Someone would take care of it, even if the business collapsed. There is no desire to bail them out, ”a source told the Financial Times.

The service currently only provides one service per day to Paris and Amsterdam due to ongoing border controls.

Eurostar first requested bailout funds from the UK government in January, when it said there had been a 95% drop in passenger numbers since March of last year.

The company is 60 percent owned by the French national rail company SNCF. The UK government sold its 40% stake in the company to private firms for £ 757.1million in 2015.

Transport Secretary Grant Shapps said last week that Eurostar “is not our business to be saved” but added: “We are very, very keen for Eurostar to survive, and we will wait to see the plan. [from state rail firm SNCF]”.

Eurostar and the UK government have had discussions over a possible state-backed commercial loan worth £ 60million for Eurostar, but talks have yet to be concluded.

SNCF chief Jean-Pierre Farandou told the FT last month that the operator was in advanced talks to secure aid from the UK and France.

“We are getting closer to the time when Eurostar will have real cash flow problems … By next month we have to conclude these talks,” he said.

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