Channel tunnel link in chaos as chairman quits

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The Independent Online
PLANS for a high-speed Channel tunnel rail link have again been plunged into uncertainty following the unexpected departure of John Prideaux, the senior British Rail executive leading the project.

Mr Prideaux, chairman of Union Railways, the BR subsidiary responsible for building the link, stepped down because of disagreements over private sector funding for the project. He has no other job to go to.

His departure signals a victory for the construction industry, which has been at loggerheads with BR for months over funding for the link. John Armitt, a former head of civil engineering at John Laing, the construction group, has replaced Mr Prideaux. Gil Harris, another BR official, is standing down as Union's chief executive.

'The funding issue still has to be resolved,' Patrick Palmer, a spokesman for BR, said. 'Clearly there have been differences of opinion.'

John MacGregor, the Secretary of State for Transport, is understood to have been concerned that Union has failed to find any private sector backing for the pounds 3bn rail-link project. Mr MacGregor is keen to push the project ahead as fast as possible after years of delay.

Eurorail, a joint venture between GEC, BICC, Trafalgar House and four firms of consulting engineers, has also become increasingly frustrated at Union's - and the Government's - failure to lay down ground rules for private sector involvement. Without such rules, they believe, the project will not attract enough capital even for the planning stage.

However, Mr Prideaux was strongly opposed to this type of private sector involvement, preferring a flotation of Union as the best way of bringing in private finance. That would have prevented private sector firms acting as sole promoters for the 68-mile line from Folkestone to central London, scheduled to open in 2001.

The disagreement between Union and the private sector companies flared up at a meeting last May. Union said it did not share the Government's aim of maximising private funding. Nor did it believe the private sector would provide enough risk capital by the autumn of 1995, when the Bill authorising the link is due to receive Royal Assent.

The situation became more complicated this month when the Government signalled its desire for private sector involvement by inviting Hochtief, a German contractor, to form a consortium to build the link. This angered Union and the UK contractors already looking at the project.

Mr Prideaux, aged 47, has spent most of his career at BR and was one of its brightest stars, at one time tipped as a future chairman.

He took over the fast-link project about three years ago but has run into a series of obstacles. His relations with contractors interested in the scheme hit a new low this summer when Union advertised for a project manager, with detailed design work to begin next March. The contractors would ordinarily have expected to have control over this key appointment themselves.

(Photograph omitted)