Cost of tunnel will be more than doubled: Eurotunnel plans to raise another pounds 1bn and schedules the opening for next May, one year over schedule

THE CHANNEL tunnel will not open officially until 6 May 1994, one year later than planned, and is likely to cost nearly pounds 10bn - more than double the original estimate - its promoter, Eurotunnel, said yesterday.

The news came as Eurotunnel announced plans to raise a further pounds 1bn from its banks and shareholders and lodge compensation claims for hundreds of millions of pounds against the British and French governments.

The official opening will be carried out by the Queen and Francois Mitterrand, the French President, who will travel in high-speed Eurostar trains from London and Paris and meet midway beneath the Channel for the formal ceremony next spring.

Eurotunnel executives stressed, however, that they expected to begin services well before that date. Sir Alastair Morton, chief executive, told the annual shareholders' meeting in London yesterday that services could be phased in between January and May of next year.

That compares with the estimate of the contractors, Transmanche Link, that no services will operate before 1 July next year.

Eurotunnel expects to be operating both freight and passenger shuttle trains before the grand opening. But the launch of through services by British Rail and its French counterpart, SNCF, will not begin until later next summer because of delays in delivery of the pounds 600m fleet of Transmanche Super Trains from GEC Alsthom.

Graham Corbett, Eurotunnel's chief financial officer, said that half the additional pounds 1bn in funding would be sought from shareholders and the other half from its banks.

The first call on shareholders could come in the form of a rights issue as early as spring next year to coincide with the start of services. If market conditions are not right Eurotunnel could raise up to pounds 200m by bringing forward to next June the exercise date for a bonus warrants issue, which was approved by shareholders yesterday.

There must be agreement from Eurotunnel's instructing banks by the end of November on how the additional finance will be raised. Eurotunnel said it expected to raise more than half the funds in 1994-95. However, it again ruled out any share issue before the tunnel opened.

Shareholders were also told that there was no end in sight to the pounds 1.3bn dispute between Eurotunnel and TML concerning cost overruns. Separately, Eurotunnel is indirectly in dispute with the consortium building its passenger shuttle trains, led by Bombardier of Canada.

But Sir Alastair said Eurotunnel would give in to neither set of contractors simply to get the project speeded up because the value of the contested claims was 15 times the net revenue Eurotunnel would forfeit even if the tunnel did not open until 1 July.

The claims against the two governments and their national railways relate to inadequate infrastructure on the UK side linking the tunnel to the rail network, late entry into service of through trains, excessive costs imposed on Eurotunnel by the intergovernmental safety commission and alleged unfair subsidies for rival ferry and airline operators.

Andre Benard, the Eurotunnel chairman, said one possible way of settling the claims would be for the the two governments to extend Eurotunnel's concession beyond 2042.

Mr Benard also told shareholders that Eurotunnel was examining the idea of bringing 'new partners' into the project. This is taken to be a reference to the possibility that some of its bankers might agree to swap debt for equity and that part of the eventual settlement with TML could include Eurotunnel shares.

Under the bonus warrant scheme announced yesterday, shareholders will be entitled to buy one new share at an exercise price of pounds 3.35 - a 20 per cent discount to Wednesday's close - for every 10 warrants held.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...