It's a plane, it's a train ... it's free

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Yesterday's announcement by Eurotunnel, the company behind the Channel Tunnel - which could be in profit by 2005 - may have had bankers and small shareholders reaching for their pearl-handled revolvers. But even if the motley crew of French dentists and lawyers, American distressed- debt fund managers and Japanese bankers might not be missed, they should not pull the trigger.

The company may be mired in pounds 9bn of debt, with shares once worth nearly pounds 12 now trading at 70p, but it still commands public loyalty, has more than 50 years of its licence to run, and has realised a century's worth of engineering dreams in bringing London closer to Paris than Edinburgh.

What makes commercial suicide an option is the company's previous pronouncements. In 1987, Eurotunnel predicted it would be profitable in 1994. In 1990, it said it would be making money by 1997; three years later, the company told its shareholders and debtors that it was only eight years away from going into the black. Last year it lost pounds 685m.

Though it is a creature born of a desire to reach the future, the lesson for the Channel Tunnel lies in the past. Twenty years ago, the breadth of another crossing, that of the Atlantic, was forever altered by a high- profile, high-tech Anglo-French collaboration - Concorde.

Drop below the clouds obscuring history, and you will remember that Concorde was a white albatross that no airline, not even the French and British flag carriers, wanted; a project that was almost shot down seven times by successive governments in the Seventies, it cost taxpayers in two countries pounds 1.2bn. Now it is known not as a commercial disaster, but as a triumph of technology.

It is the only commercial airliner that, flying east to west, can overtake time, and it does not rust because its sound-booming speed vaporises water on its surface. British Airways even has the chutzpah to say it is making money from its fleet of sleek, supersonic jets. This is slightly disingenuous, as it received seven planes free thanks to the largesse of the public purse.

When it came to building the Channel Tunnel, the invisible hand of the market had slapped governments so hard that pouring taxpayers' cash into a state-funded grand projet was not considered. Instead, the cannier administrations ensured that the price of progress was paid for by the private sector. Entrepreneurial flair bored the 30km concrete tube through 10m of chalk under La Manche; private capital costed the risks. Now big business is praying it has not got its numbers wrong. Again.

But the moneylenders' loss is the public's gain. The Tunnel has been the greatest commercial disaster of the 20th century. Imagine the outcry if Eurotunnel had been kept going with cash from the state, until it could be handed over to the private sector who then used it as a sparkling loss leader for a privileged few. Instead, after years of receiving lectures from business about the inefficient, bloated public sector, it is worth noting that the market, in Eurotunnel's case, has proved as inept as the state.

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