German railways on track for Brexit boost

High-speed German trains could soon be shuttling financial chiefs between London and Frankfurt. [FlareZT/ Shutterstock]

German railway company Deutsche Bahn remains interested in setting up a Frankfurt-London route. The UK’s Brexit vote and potential relocation of financial services to mainland Europe means demand could skyrocket.

British media reported last week that Deutsche Bahn (DB) intends to introduce a high-speed rail service between Germany and the UK in 2020 or soon after. The operator was awarded a certificate to run passenger services through the Channel Tunnel in 2013.

The chairman of Eurotunnel (the group that manages and owns the tunnel), Jacques Gounon, told The Times that he is awaiting a meeting with DB’s new CEO. Gounon insisted he is “quite sure” the service will happen.

Although DB has distanced itself from the reports, telling the International Railway Journal it has no plans to launch in 2020, the demand for a train service linking the continent’s two main financial hubs remains and is only set to increase.

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While struggling to secure approval for its Siemens-built high-speed trains on certain parts of the Belgian and French rail networks, DB is likely to be granted approval in the near future, as its trains are similar to stock that already operates between London, Paris, Brussels and, soon, Amsterdam.

The only other obstacle DB has identified is the economic argument about whether the route is actually viable. But the United Kingdom’s decision to leave the EU last year could provide the demand DB is after.

Leaving the bloc is likely to force financial service providers and banking powerhouses to relocate either completely or partly to mainland Europe, as all-important passporting rights could be lost once the UK has withdrawn.

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There will certainly be a demand for a high-speed train service as a result, as senior executives and bankers will need to shuttle between the two centres. Given the congestion of airspace for short haul flights in Western Europe and EU emissions targets, a rail service ticks more than one box.

The 640 kilometre-long trip from Frankfurt to London is estimated to take five hours. High-speed train links from London have started to take off recently, with Eurostar services beginning to operate to the south of France and Amsterdam, 23 years after the opening of the Channel Tunnel.

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Background

The European Commission’s recast of the first railway package in 2001 was adopted in 2012. It was designed to address the historic challenges to creating a consolidated railway market.

The EU executive considers the rail sector as having too little competition, poor regulatory oversight and inadequate public and private investment.

The 2012 recast consolidates the 20012004 and 2007 legislation and provides for strengthening regulatory oversight and performance of infrastructure operators. It also seeks to improve transparency in rail contracts and operations.

The Commission's 2013 proposal called for a separation of rail infrastructure managers and service operators, a full separation of passenger rail markets by 2019 and public tendering for most rail routes.