TORONTO - Two of Canada's biggest pension fund managers are reaching across the pond to buy a high-speed rail line from the British government, which says it is privatizing the asset to help slash its record debt.

Borealis Infrastructure, an arm of OMERS, which manages the pension plans for Ontario's municipal employees, and the Ontario Teachers Pension Plan will pay $3.4 billion to the British Department of Transport for a 30-year franchise right to the 109-kilometre line between London and the Channel Tunnel.

The Canadian consortium will receive revenue from access charges paid by train companies using the line. The principal user now is Eurostar, operating services to Paris and Brussels. Germany's Deutsche Bahn has also announced an interest in starting high-speed services between Germany and London.

"HS1 is a high-quality asset ideally suited to our investment criteria and we are extremely pleased that our bid was selected," Stephen Dowd, senior vice-president for the Teachers' infrastructure group said in a release.

Infrastructure is a favourite investment for pension funds because it is seen as a safe and dependable long-term asset with a steady revenue stream. A number of other Canadian pension plans, including the Canada Pension Plan Investment Board, have been scooping up infrastructure assets around the world.

A spokeswoman for Teachers' said Friday the pension funds could not comment further until the deal closes, which is expected to be sometime in the near future.

Michael Rolland, president and chief executive of Borealis Infrastructure, said the rail link operates in an attractive and stable regulatory environment.

"This acquisition supports OMERS long-term strategy to diversify internationally and we view the UK and Europe as primary markets in meeting this objective," Rolland said in a release.

The British government, which is saddled with a massive 156-billion pound ($253 billion) budget deficit will continue to own the line, associated infrastructure and land. It says the deal with the Canadian pension consortium will be good both for taxpayers and transit users.

British Transport Secretary Philip Hammond said the sale will help the reduce the country's record debt and will provide opportunities for new services on the lines.

"This is great news for taxpayers and rail passengers alike. It is a big vote of confidence in UK plc and a big vote of market confidence in the future of high speed rail," he said in a release.

"It also shows that the decisive action this Government has taken to reduce the deficit is already paying dividends and that investors believe once again that Britain is open for business."

The British government plans to cut 81 billion pounds ($128 billion) from public expenditure over the next four years. The government is privatizing some assets, in addition to cutting spending and public sector jobs to meet that goal.

England is prioritizing the improvement of infrastructure, noting that congestion on roads costs the economy some 20 billion pounds each year and rail delays another 1 billion pounds.

Borealis Infrastructure is a unit of OMERS Worldwide, which has net assets of $48 billion. Its British investments include stakes in Associated British Ports and Scotia Gas Networks.

The Ontario Teachers' Pension Plan, with assets of $96 billion, is Canada's largest single-profession pension plan. Its U.K. investments include lottery operator Camelot Group, Bristol International Airport, Birmingham Airport and Scotia Gas Networks.

The pension consortium follows a number of other Canadian investors who have also recently bought up properties in England.

In October, OMERS announced it would team up with British Land Co. PLC. to co-develop a 47-storey office tower in London's financial district.

Canada Pension Plan Investment Board recently teamed with Onex Corp. (TSX:OCX) to acquire British manufacturer Tomkins PLC for US$5 billion. Tomkins makes car parts, machinery and other consumer and industrial products.

In August, the CPP board made two plays for global commercial real estate. It partnered with a European real estate firm to buy an eight-floor office building in London, for 183 million pounds (C$297 million) and teamed up with Australia's Future Fund to invest A$750 million (C$702 million) in a retail property fund.