3.4 In addition to the domestic obligations on the Government, there are international obligations on the UK under the Channel Tunnel Usage Contract 1987, which governs the use of the Channel Tunnel itself. These oblige the UK and French governments to provide sufficient passenger and freight rail infrastructure to meet forecast demand for use of the Tunnel. At the time the Usage Contract was agreed, the UK's obligations stated that investment in such infrastructure had to meet British Rail's investment appraisal criteria.
3.5 Eurostar services are jointly operated by Eurostar UK and the French and Belgian State railways. As a private sector train operator, Eurostar UK has greater commercial incentives to compete effectively and maximise revenues and profits than do the two state-owned companies. Joint operation has, in the past, reduced Eurostar UK's flexibility to respond to changes in the market. However, the three companies are now operating together under a new joint management structure, Eurostar Group, which is intended to improve co-ordination of objectives and marketing strategies.