Government slams door on £8bn freight railway line

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The Independent Online

The Government yesterday pulled the plug on an £8.5bn freight railway line linking the North-west of England and northern France, provoking a furious response from the developers of the project.

The Government yesterday pulled the plug on an £8.5bn freight railway line linking the North-west of England and northern France, provoking a furious response from the developers of the project.

Kim Howells, the Transport Minister, told the Commons that the Government had decided not to promote a hybrid Bill through Parliament paving the way for Central Railway to build the 400-mile line, claiming the company could not guarantee to raise the necessary private finance.

Mr Howells also said the Government had concerns about the impact of the line on the environment and the existing rail network, which itself needs billions of pounds in public and private finance for renewal and modernisation.

The decision marks the end of a dream for Central Railway and its chairman, Andrew Gritten, a former policy adviser, who has spent the past 14 years promoting the scheme.

He said the line, running from Liverpool to a terminal near Arras in northern France via the Channel Tunnel, would have followed disused lines for all but 40 miles, removed 5 million lorries a year from Britain's roads, and helped regenerate the North-west.

Central Railway had received expressions of interest from 15 banks prepared to provide debt financing, including, it is thought, Citigroup, UBS, Deutsche Bank and Commerzbank, and had offered the Government an undertaking that there would be no call on the public purse.

But Mr Howells said: "Once the Government had agreed to promote a Bill, inescapably it would be taken to be backing the project. Should initial finance not be raised, or the project run into financial difficulty once work was under way, the government of the day could not escape intense pressure to intervene."

Mr Gritten said, however, that he had told the Transport Secretary, Alistair Darling, a year ago that Central Railway could not guarantee funding for the line until a Bill had been piloted through Parliament and ministers had understood that.

"It has taken 14 years to get the project this far but there is nothing more we can do unless the Government has the balls to back it. It hasn't, as I told Mr Howells this morning, because the Secretary of State didn't have the balls to tell me himself. We are dealing with a bunch of ministers who do not want to take any risk whatsoever. It is not a great invitation to the private sector to try something like this again."

Central Railway has spent about £20m on the project. "They could have told us this a year ago and saved wasting everyone's money," Mr Gritten said.

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