Breakdown in cost talks could delay Channel tunnel opening

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THE OPENING of the Channel tunnel was threatened with further delay yesterday after talks between Eurotunnel and its contractor, Transmanche Link, over a pounds 1.27bn cost dispute ground to a halt amid fresh acrimony, writes Michael Harrison.

Last night Eurotunnel re-iterated its intention to begin services in December 1993 despite the row. But a senior executive from the consortium of 10 British and French contactors said that even if the cost dispute was resolved immediately, freight services would not begin until January 1994 with passenger shuttles not starting for at least a month after that.

Earlier in the day, TML had issued a statement saying that negotiations were at a 'standstill' and suggesting that the failure of the two sides to reach a settlement could jeopardise the speedy completion of the pounds 9bn project.

As the air grew thicker with accusation and counter-accusation, Eurotunnel sources insisted that there was no more money available while TML executives intimated that the contractors would in effect impose 'work to pay'.

Sources on both sides conceded that an element of sabre-rattling was taking place and that a delay in the completion of the tunnel would be in the interests of neither Eurotunnel nor TML.

But considering the personality clashes that have riven negotiations and the seemingly entrenched attitudes on both sides, the dispute may not be resolved until next year when an independent arbitration panel gives its ruling.

The disclosure that the talks had reached deadlock came barely a week after Sir Alastair Morton, Eurotunnel's chief executive, and Joe Dwyer, chief executive of Wimpey, one of the five British contractors, had held what was described as a 'negotiating lunch'.

Despite Eurotunnel's insistence that negotiations had not broken down, it now appears that to all intents and purposes, the talks stalled as long ago as last summer.

Although the two sides are separated by only pounds 100m- pounds 120m, the sticking point concerns Eurotunnel's offer to finance part of the payment through a share issue to the contractor.

TML said that even this offer had now been withdrawn, leaving the two sides as far apart as they were six months ago. However, Eurotunnel said the way was open for more discussions.

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