Railtrack offered £375m for rights to Channel Tunnel Link

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Railtrack disclosed yesterday that it has received a £375m offer for its interest in the high-speed Channel Tunnel Rail Link.

The offer is worth about 70p a share and brings the collapsed network operator closer to its goal of obtaining compensation for shareholders of 360p a share.

London & Continental Railways, the consortium behind the 68-mile link from the Kent coast into London's St Pancras station, has offered £295m to acquire Railtrack's rights to the first section of the line.

Separately, Network Rail, the not-for-profit company being set up by the Government to replace Railtrack, has offered to pay £80m for the right to operate the completed link and the St Pancras terminal when it enters service in 2007.

Railtrack hopes to put the two offers to a shareholder vote in June. The deal with Network Rail is contingent on Railtrack deciding not to press ahead with legal action against the Secretary of State for Transport Stephen Byers in pursuit of its compensation claim.

Including the £500m offer to Railtrack shareholders made last week by the Government and Network Rail and cash and property already owned by Railtrack Group, which is not in administration, shareholders stand to receive a payout worth about 250p a share.

Railtrack's chairman Geoffrey Howe welcomed the offers for its interest in the CTRL but declined to comment on whether legal action was now less likely.

Phase one of the CTRL, from Folkestone to Ebbsfleet in north Kent, is costing £1.9bn to build and is due to enter service in September, 2003. The second phase of the project, which involves tunnelling large stretches of line beneath London, is scheduled to cost £3.3bn and will enter service four years later. Railtrack scrapped its option to buy the second phase of the CTRL last September because of the complexity of building the final stages of the link and the pressure it would have put on its balance sheet.

A Railtrack spokeswoman said that London & Continental Railways was always the most likely bidder for its rights to phase one because it owns both Union Railways, which is building the line, and Eurostar UK, the operator of the existing rail service to Paris and Brussels.