Channel Tunnel link at risk of going off the rails

Construction firm says government delay in funding £300m depot is jeopardising the £3.3bn project. Clayton Hirst reports

The company behind the construction of the Channel Tunnel Rail Link has told the Government that delays in stumping up £300m could threaten the project.

The company behind the construction of the Channel Tunnel Rail Link has told the Government that delays in stumping up £300m could threaten the project.

The warning is understood to have been made last week during a meeting between the chairman of London & Continental Railways (LCR), Rob Holden, and Kim Howells, the transport minister.

LCR, whose largest shareholder is the US construction giant Bechtel, has started work on the £3.3bn second phase of the rail link between London St Pancras and north Kent. It is due to open in 2007. However, LCR is waiting for Government funding approval to build a £300m rail depot at Temple Mills near Stratford, east London.

The depot is critical to the rail link. The Channel Tunnel train operator, Eurostar, currently maintains its rolling stock near Waterloo station. But it will soon move its base to St Pancras.

LCR and Eurostar are becoming increasingly concerned that the Department for Transport (DfT) has yet to give approval to the scheme.

One source close to the project said: "If there is no Temple Mills then there is no Channel Tunnel Rail Link phase two."

Another source said: "If the DfT drags its heels much longer, then because of the construction times, things will start to get critical in a month or so."

A DfT spokesman said: "We're now exploring with LCR the scope for building the Temple Mills depot for the Channel Tunnel Rail Link opening. Those discussions are ongoing."

It is understood that one reason for the delay is that the Treasury hasn't yet signed off the DfT's budgets for a number of new rail schemes. Other projects still on the stocks include Crossrail and the East London line.

There has been speculation that the DfT had gone over budget as a result of the recent decision to allow Network Rail to spend an extra £7bn over the next five years, taking the infrastructure company's total budget to £22.2bn.

A DfT spokesman denied the department had gone over budget. However, he said: "We assess projects on a case-by-case basis. With railway industry costs rising, the department must always strive to be cost effective and provide value for money for the taxpayer."

The spokesman added that the DfT is spending more than £70m a week on the railways.