I am today announcing that the UK Government are in the course of concluding their negotiations with SNCF and SNCB to incorporate the existing tri-national Eurostar operations into a single company. The UK Government, via London and Continental Railways Ltd, will have a substantial minority shareholding in the new Eurostar company. Subject to further work and final agreement, this shareholding will be in the order of 40 per cent.

Eurostar is the pre-eminent international passenger train operator. This is recognised by the record 9 million passengers who used the service to travel between London and the continent last year, following the opening of the High Speed 1 line from St Pancras International station. Eurostar not only is a very successful service, but has also saved around 40,000 tonnes of carbon dioxide emissions as a result of attracting extra travellers who would otherwise have travelled by plane since the move to High Speed 1.

The Government's aim, as a shareholder, has always been to provide Eurostar with the stability and sustainability to develop its services on a properly stand-alone commercial basis, operating in a newly competitive market. The proposals under finalisation with SNCF and SNCB are designed to achieve those objectives.

The principal part of the discussions to be concluded is to convert the present Eurostar operation, which is an unincorporated joint venture operating co-operatively but separately in the three partner countries, into a single incorporated company. As such the UK will contribute to the new venture the assets and interests of Eurostar (UK) Ltd, which is currently a wholly owned subsidiary of London and Continental Railways Ltd.

The company will have a strong board with an independent chairman and independent non-executive representation, as well as UK and other partner shareholder representatives. There will be proper shareholder rights and protections for the UK as a minority shareholder.

The final terms remain subject to further work being undertaken by the Eurostar management and final commercial agreement between the parties and a confirmation that SNCB will join the new venture. I expect to make a further announcement on these matters later this year.