Eurotunnel claims pounds 500m from TML
Monday 18 September 1995
TransManche Link, the Anglo-French group of 10 builders that includes Balfour Beatty, Taylor Woodrow and Bouygues, is planning an emergency meeting to decide its response.
TML executives are said to be stunned by Eurotunnel's decision, and by suggestions from reliable sources that it will be seeking around pounds 500m for "unsatisfactory management" of the rolling stock.
One TML source said: "We thought all the outstanding claims were settled long ago. Eurotunnel's intention to seek compensation took us by surprise."
Eurotunnel, which last week suspended pounds 2m-a-day interest charges on its pounds 8bn of debts, may open up legal action on several fronts, including against the British and French governments.
The tunnel operator is already in dispute with European Passenger Services, owned by British Rail and the French railway company SNCF. The total value of legal claims by Eurotunnel could, according to some estimates, be well over pounds 2bn. It is money that the company desperately needs, but legal action could take many years.
TML believed all outstanding legal issues had been settled two years ago, when the agreement to hand over the tunnel to the operating company was concluded.
The consortium, which is expected to contest any claim, is likely to argue that any further complaints about unreliable rolling stock be directed against the suppliers.
The TML source said: "For the final part of the building contract, Eurotunnel was working directly with the rolling stock companies. TML was on the fringes."
Eurotunnel would not confirm the size of its claim against TML, nor when it might begin the action.
Despite the possibilitiy of lucrative compensation payments, it does not avoid the pressing need for a restructuring, a worry that caused Eurotunnel's shares to sink 23p on Friday to a new low of 119p.
It was claimed over the weekend that Eurotunnel's bankers were demanding the removal of Sir Alastair Morton as co-chairman as a pre-condition of the financial restructuring.
A spokesman, who said he was present at meetings between the company and bankers last week, said the matter was not raised. He accepted, however, that the banks were upset at the suddenness with which Eurotunnel announced its intention to suspend interest payments.
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