Ferrovial may bid for Channel Tunnel link

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The Independent Online

The management of London & Continental Railways and Ferrovial, the Spanish infrastructure giant stalking BAA, are among the potential bidders for the high-speed Channel Tunnel rail link, it has emerged.

Ferrovial, which already owns two-thirds of the London Underground contractor Tube Lines, is expected to run its slide rule over LCR, the company responsible for developing the £5.2bn link. But it has not yet decided whether to bid in competition with the consortium put together by the former government adviser Sir Adrian Montague and Goldman Sachs, which approached the Government last month about acquiring LCR.

Alistair Darling, the Secretary of State for Transport, confirmed yesterday that an "open, transparent and competitive" process would be put in place if the Government did decide to agree to auction off the link and made it plain that the LCR management itself would be free to make a bid. Mr Darling said that to protect the interests of the taxpayer he wanted to ensure "value and transparency with a level playing field for all participants, including the incumbents".

The management of LCR, which is owned by Bechtel, UBS and National Express, refused to be drawn on whether it was contemplating a buyout. But a spokesman said: "We welcome a level playing field."

Other rumoured bidders include the private-equity firms Macquarie Bank and Babcock & Brown. Network Rail is also seen by some as a natural potential bidder, although observers pointed out that it could be difficult for LCR's £6bn of government-backed debt to go on Network Rail's balance sheet without its own £19bn of borrowings also being included in the public finances.

Ferrovial is attempting to assemble a consortium of financial partners to acquire BAA so may find itself stretched if it also bid for LCR.