Tunnel 'makes it tough for European projects'

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The Independent Online
BRUSSELS - The European Commission warned that the experience of trying to raise private funds for the Channel tunnel will make it harder to finance the European Union's planned infrastructure projects, writes Sarah Lambert.

Henning Christophersen, Commissioner for Economic Affairs, said: 'The lesson we have learnt about the Channel tunnel is that there must be a clearer division of labour and responsibility between the public authorities, the operators, contractors and financiers. The experience has made investors far more wary - our task will, as a result, be all the more difficult.'

The Commission plans to implement 10 trans-European network projects, approved by EU member states to help stimulate the European economy. The projects - seven rail links, two roads and an airport - include the extension of the fast TGV train line linking eastern France through Paris, Metz and Strasbourg into Germany.

The cost overrun of the first phase beyond the EU budget of ecus32bn ( pounds 24bn) will not all be met by private investors. The Commission reckons they will only be prepared to pick up 20 per cent of the shortfall.

Mr Christophersen suggested the gap could be closed by offering investors guarantees underwritten by the EU budget, or by raising loans in capital markets.

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