The UK's new government said it will sell off state-owned rail, aviation and postal assets as part of a deficit reduction program.
The Liberal-Conservative coalition administration will auction off a high speed rail track from London to the Channel Tunnel which links the UK and France.
The state's 49 percent stake in the air traffic control company NATS will also be sold to private investors, the government announced as it presented an emergency budget.
Partial privatization of Royal Mail, the state-owned postal company, is also part of a radical program designed to cut a record $232 billion budget deficit over the next four years.
The sale of a concession to operate High Speed One, the UK's only high-speed rail track for thirty years, is expected to raise up to $2.25 billion.
The UK government took over the owner of the track, London & Continental Railways, last June under a deal signed in 1998 when it guaranteed $4.9 billion of the financially troubled firm's debts.
Eurotunnel, operator of the cross channel tunnel, is reportedly interested in bidding for the track alongside U.S. investment bank Goldman Sachs.
Eurotunnel is expanding its rail freight operations and trying to boost use of the tunnel by other cargo railways. The company recently bought GB Railfreight, the UK's third largest rail freight operator, for $46 million following its acquisition last year of the French operations of Veolia Cargo.
Freight traffic through the tunnel has failed to meet forecasts since the link was opened in 1994 with an annual capacity of 10 million tons a year. It carried only 1.2 million tons in 2009 and has only once handled over 3 million tons.
The government's stake in NATS is said to be worth around $750 million but a sale will be challenging in current market conditions. The other owners are the Airline Group, a consortium of airlines which has a 42 percent stake, and BAA, the owner of London Heathrow and five other UK airports which has a four percent shareholding. The remaining five percent is held by NATS employees.
The previous Labour administration pulled plans to sell 30 percent of Royal Mail last year amid a revolt by its own lawmakers and unions.
CVC Capital Partners, a Luxembourg-based private equity firm, reportedly offered around $3.3 billion for a 30 percent stake, well short of the government's $5 billion valuation.
TNT, the Dutch mail and express group, also expressed an interest in Royal Mail which analysts saw as a bid to get control of the company's profitable parcel delivery unit, General Logistics Services.
-- Contact Bruce Barnard at email@example.com.