Eurotunnel challenges pounds 40m rates bill
Tuesday 01 November 1994
City analysts fear the company, which has lurched from one crisis to another ever since it was launched, may not have fully provided for such a large rates burden in its forward projections of costs.
Eurotunnel dismissed concern that the rates bill could plunge the company into a fresh financial crisis, claiming that it had ``provided for'' rates in figures given to bankers and investors. However, the company refused to be drawn on precise sums. Investors did not anticipate a rates bill of pounds 40m or anything like it.
Sir Alastair Morton, Eurotunnel's co-chairman, is believed to have appealed to the Department of Environment to use discretionary powers to help cut the rates bill. He is said to have been stunned when told of the likely figure.
The local valuation officer for Folkestone, where Eurotunnel built its terminal, has estimated that the company's total rateable value is around pounds 100m. As a business ratepayer Eurotunnel would pay 42p in the pound - pounds 42m.
Talks are being held between the company's advisers and the valuation officer about reducing the rates burden, and also about when Eurotunnel should start paying.
The Department of the Environment said Eurotunnel would be rated from April this year, though other observers argue that it could start from 6 May, when the Queen opened the Channel tunnel. The company does not want to start paying until the project is fully operational.
Talks have become bogged down in such matters as whether the sea bed has a rateable value. ``Sir Alastair argues that as ferry companies don't pay rates on the sea they use, why should Eurotunnel pay rates on the sea bed,'' said one source.
Eurotunnel said it had covered the rates bill in its operating costs, which are estimated at pounds 114m in 1994 and pounds 115m in 1995. But a pounds 40m-plus rates bill would take a large chunk out of these costs, which also include expenses for transport operation, marketing, financial fees, and start-up costs. ``This figure is not a surprise, but until our rates have been formally assessed we are not prepared to comment,'' a spokeswoman said.
Since its launch Eurotunnel has soaked up more than pounds 11bn of investment, about pounds 9bn of which is bank debt. It is not expected to make profits until at least 2003. By next spring it will have used up the pounds 850m it received from a rights issue, and will have to draw down a further pounds 700m in bank loans.
View from City Road, page 29
- 2 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 3 University student in court for allegedly covering housemates' food in window cleaner and spit
- 4 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
£13676.46 - £16411.61 per annum + OTE: SThree: SThree Trainee Recruitment Cons...
£18000 - £22000 per annum + training: Ashdown Group: Business and Marketing Gr...
£20000 - £25000 per annum + Commission: SThree: Are you great at building rela...
£20000 - £22000 per annum + excellent benefits: Ashdown Group: Application Sup...