BR fights for control of Channel link: First test train hauled through tunnel - Friction with private sector partners revealed - Business - News - The Independent

BR fights for control of Channel link: First test train hauled through tunnel - Friction with private sector partners revealed

BRITISH RAIL is at loggerheads with its private sector partners over plans for the high-speed Channel tunnel rail link, it has emerged.

On the day that the first purpose- built rolling stock made a test crossing through the tunnel, it emerged that although the Government wants responsibility for the pounds 3bn rail link project to be transferred to the private sector as quickly as possible, BR executives are fighting a rearguard action to retain maximum control over the management, design and financing.

The BR subsidiary responsible for taking the link forward, Union Railways, intends to appoint its own project manager next month even before the Government has finished considering the most appropriate form of private financing.

John Prideaux, chairman of Union Railways, also favours a flotation of the business as the best way of bringing in private finance - a move that would freeze out private sector firms interested in acting as sole promoters on the project, due to open in 2001.

The friction between Union Railways and the private sector is disclosed in confidential notes of a meeting last month attended by Mr Prideaux and private sector consultants already involved in development of the 68-mile route from Folkestone to central London. The consultants are Eurorail, a joint venture between Trafalgar House, GEC and BICC, and four firms of consulting and civil engineers - Ove Arup, Mott MacDonald, Scott Wilson and Sir Alexander Gibb and Partners.

According to the notes, Union Railways does not share the Government's objective of maximising private sector involvement at the earliest opportunity and does not believe the private sector will come up with much risk capital before autumn 1995 - when the hybrid Bill authorising the link is due to receive Royal Assent.

John MacGregor, Secretary of State for Transport, will need to resolve the looming conflict between Union Railways and the private sector if the project is to move forward. Last Friday was the deadline for submissions on how private sector finance could best be harnessed to public funding of the project.

Mr MacGregor hopes to reach a decision as early as next month on the most appropriate form of private financing. But some consultants working with Union Railways believe this is hopelessly optimistic given the uncertainties surrounding the project.

It is still not known whether the link will terminate at an above- ground station at St Pancras or a much more expensive underground terminus at Kings Cross. Nor has much headway been made on deciding where to locate intermediate stations.

(Photograph omitted)

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