Tunnel deadline given to UK and France

Eurotunnel warned yesterday that the restructuring of its pounds 8.7bn debt mountain is at risk unless the British and French governments agree to extend its concession to run the Channel Tunnel. The company is in negotiations to extend the concession from 65 to 99 years and has set a deadline of the end of March for agreement from the two governments.

Robert Malpas, co-chairman of Eurotunnel, said yesterday in Folkestone: "An extension is critical if we are to secure the support of our bankers and shareholders for the financial restructuring. Without it, it will be even more difficult."

He was speaking as Eurotunnel announced that it had recaptured a third of the cross-Channel market since the freight shuttle fire in November which forced it to close the tunnel. Eurotunnel expects its market share to return to 50 per cent by the end of the year with total revenues forecast to increase to about pounds 600m compared with pounds 450m last year.

The total cost of the fire, including lost revenue, repair work, compensation payments and the replacement of the burnt-out shuttle, is forecast at a maximum of pounds 265m-pounds 270m. However, Eurotunnel said its insurance would cover it for all but pounds 5m-pounds 7m of this.

The only remaining clues to the terrifying conflagration that took place are the exposed steel reinforcing bars hanging from the tunnel roof. The sheer heat of the fire stripped away three-quarters of the 40cm thick concrete lining covering them.

Yesterday, nine weeks to the day after the blaze, work began to repair the tunnel so that it will be "as good or better than the original", according to David Pointon, Eurotunnel's technical director. A team of 140 engineers will work around the clock for the next 16 weeks to repair the lining and renew the burnt out electrical systems.

What remains of the lining will be secured with hundreds of 2.5-metre steel bolts. The engineers will then spray the tunnel walls with concrete from specially adapted trains. When the tunnel was originally built the concrete lining was fitted in giant pre-cast slabs. As a precaution, the most severely damaged part of the tunnel - a 46 metre-long section - is temporarily being supported with steel colliery arches.

The tunnel floor is, disconcertingly, a few inches deep in water and everywhere the tunnel lining is blackened by smoke. But Mr Pointon says: "We have monitored for structural movement and drilled numerous boreholes and the news is good. There is very little ingress of water and no structural movement."

The company said it did not believe the fire would affect its debt restructuring. But because it does not expect to resume full services until June, it has asked its banks to extend its debt standstill, under which Eurotunnel has suspended interest payments on its loans, until the end of the year. Passenger numbers fell by almost a half in December in the wake of the fire and the subsequent reduction in services. No freight shuttles have operated since the incident. Eurotunnel is aiming to restart freight shuttle services by the end of March and complete repairs to the fire-damaged section of the tunnel by mid-May so that it can resume a full service from June.

The plan is to have achieved a full recovery from the fire by the end of 1997. Eurostar services are back to 90 per cent of normal levels while passenger shuttle services have recovered to 50 per cent of their levels before the fire. Despite the fire, revenues rose by more than 60 per cent to pounds 450m as the number of passengers using the tunnel increased from 8 million in 1995 to 13 million. Eurostar handled just under 4.9 million passengers, giving it 66 per cent of the London-Paris market, while Eurotunnel's Shuttle service carried more than 2 million cars and 58,000 coaches, giving it a 50 per cent share of the tourist market.

So far Eurotunnel's insurers have paid pounds 34m for lost revenue in 1996 and the company said it was confident that the impact of the fire on its finances in 1996 and the first half of this year would be limited.

Last year Le Shuttle carried more than half-a-million trucks, against 400,000 in 1995, while the railways handled 2.4 million tonnes of freight. Until the fire interrupted services, passenger numbers were 87 per cent up on 1995.

Start your day with The Independent, sign up for daily news emails
News
A poster by Durham Constabulary
news
Arts and Entertainment
books New York Times slammed over summer reading list
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine