Capital costs of Heathrow Southern Railway are estimated at £1.3 billion

A new company – Heathrow Southern Railway Ltd (HSRL) – will build and own the infrastructure, the capital cost of which is estimated to be around £1.3billion (2016/17 prices).

The scheme will be privately financed and will be licensed by the Office of Rail and Road (ORR). HSRL will be at risk for the costs of development, construction and availability of the new railway, in return for contractual commitments from the Department for Transport to underwrite a defined quantum of train paths. The Train Operating Companies which will provide passenger rail services over the new infrastructure will pay access charges to HSRL, the framework for which will be regulated by the ORR. The Train Operating Companies will retain revenue risk, and our business case does not rely on premium fares being charged. Our forecasting shows that the new to rail revenues which arise from the new services to / via Heathrow will be sufficient to cover the operating costs and access charges of the new railway, meaning that the scheme in operation once mature is not expected to require subsidy from taxpayers.