View From City Road: Light hearts at the end of the tunnel saga

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The Independent Online
The spectacle of Eurotunnel's chief executive, Sir Alastair Morton, shaking a building contractor by the hand rather than the throat is rare indeed. But the significance of yesterday's handshakes goes far beyond sheer novelty value, for the deal on the opening of the Channel tunnel should presage much more than just a new era of understanding between client and contractor.

The Channel tunnel will form the first physical link between Britain and the Continent since the Ice Age. Sadly, it has also passed into the record books for less inspiring reasons. The longest dispute between client and contractor (Eurotunnel and Transmanche Link first locked horns in 1987). The fastest escalation in outturn costs - pounds 10bn and counting. The biggest number of fund- raising exercises for one project. The longest default of loan covenants in banking history (on Eurotunnel's part). Take your pick.

A large number of disparate interests will be rejoicing this morning - most obviously Eurotunnel's long- suffering bankers, its 600,000 or so private shareholders, the five construction companies that make up the UK half of TML and finally the British and French governments.

To take the banks first, the agreed opening date means that Eurotunnel has certainty as to when the project will start earning money and therefore when their pounds 7.3bn in loans can start being repaid.

For the shareholders there is also light at the end of the tunnel. Not only can they look forward to their first free trip under the sea, but they can, whisper it quietly, just maybe start thinking about a dividend payment this millennium.

For the contractors, some of whom have been on the brink of collapse because of recession, the relief is obvious. The extra pounds 235m up front may not be as much as they had wanted but it is jam today not paper and shares tomorrow, as had been on offer.

As for the two governments, having lauded the original agreement paving the way for the link as a historic moment, they had plenty of political kudos to lose. In Britain's case the incessant wrangling over costs and completion dates was also an appalling advertisement for private funding for public infrastructure projects.

Which just leaves one loose end: how on earth will the acerbic and easily bored Sir Alastair pass the time now that there is no longer a crisis to manage?

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