Eurostar concerns fuelled by pounds 217m aid fuels point headline goes in here like this

The viability of Eurostar has again been questioned after claims that the Channel tunnel train operator has received emergency aid of more than pounds 200m, writes Russell Hotten.

European Passenger Services, Eurostar's parent, is due to transfer into the private sector this year, though rival bidders are said to be unhappy about the financial projections.

An extra pounds 217m is believed to have been injected into Eurostar because passenger numbers are well below targets, and because of problems with a multi-million-pound computer system.

Two consortia are left on the shortlist to buy EPS, and the winner will also have to take on the massive task of building the 68-mile high-speed rail link between London and the tunnel.

Eurorail, a joint venture that includes BICC, HSBC Holdings, NatWest Bank and Trafalgar House, has been tipped as the most likely choice. Its rival is London and Continental, consisting of the Virgin Group, Bechtel, Ove Arup, and National Express. Both groups are thought to have told the Department of Transport that their final bids may be lower because EPS has not been as successful as first hoped.

Brian Wilson, Labour's transport spokesman, said yesterday that the extra money, disclosed in Treasury documents, was another acute embarrassment for the Government. This new cash injection was ... simply a sweetener to the consortium that won the bidding, he added.

A spokesman for the Department of Transport declined to discuss the level of subsidy. But he said: "EPS is still in a start-up phase and this inevitably means the Government funding any losses."

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