Eurotunnel attacks 'cynical' forecasts

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Sir Alastair Morton, co-chairman of Eurotunnel, the Channel Tunnel operator, yesterday accused British Rail and the UK and French governments of providing "cynical" forecasts at the project's outset for the number of passengers who would pass through by rail.

"Eurotunnel was intended by the two governments to use these high forecasts to go out and raise money from you, the fund managers and underwriters; and from the world banks; and in due course from the enthusiastic small investors in Britain and France," he said in a speech at a Robert Fleming conference about Europe's high-speed railways.

In one of his most hard-hitting attacks on the UK Government so far, Sir Alastair said an estimate of 16 million passengers a year made in 1986 - "when our promoters were being led on by Her Majesty's Government" - had since been dramatically reduced to 5.1 million passengers. The short- fall in rail passengers is one of the reasons Eurotunnel is having to renegotiate its banking arrangements with its main backers.

Sir Alastair warned potential operators and investors in the proposed high-speed Channel Tunnel rail project to "count their fingers very carefully before and after any handshakes at their meetings with the Department of Transport and double their battalions of legal advisers".

He said that, two weeks before Christmas, Eurotunnel's dialogue with bankers was thrown into chaos by the updated forecast of traffic through the tunnel for the rest of the century.

Under the concession granted to Eurotunnel, the operator had to assure the British and French railways that it would give up half its capacity to rail traffic. In return the company received an annual minimum payment of pounds 200m a year.

Sir Alastair's point is that since the rail traffic figures have been so poor the Eurotunnel project has inevitably disappointed on its revenue figures. Sir Alastair said there were various protests from the embryonic Eurotunnel group which tended to question the size of the traffic figures. But attempts to seek "to share in the railway revenues rather than fix the price per passage ... were steam-rollered".