Channel link survives financial nightmare: Tunnel operator sets about task of turning project into a success after years of conflict over the soaring costs of construction

WHEN THE 10 building contractors of Transmanche Link hand the keys to the Channel tunnel to Eurotunnel today, they will put behind them the longest, costliest and most acrimonious dispute the construction industry has ever seen.

The tunnel may be a triumph of engineering skills, perseverance and Anglo-French co-operation. But it has also come perilously close to being a financial disaster on an unprecedented scale, knocking the Humber Bridge, Canary Wharf and even Thorp into a cocked hat.

A project that was supposed to cost pounds 4.8bn has more than doubled in price to pounds 10bn and when the Queen and President Francois Mitterrand preside at the state opening next May it will be exactly a year late entering service.

Almost from the day Eurotunnel won the concession to build the link in January 1986, the project has been dogged by crisis.

The root cause was, invariably, money. To Sir Alastair Morton, chief executive of Eurotunnel, the five British and five French firms that make up TML were grasping contractors, intent on shoring up their own creaking finances by milking the project, and the shareholders and bankers financing it.

To construction chiefs at TML, Eurotunnel was the usual cheeseparing client, demanding a Rolls Royce for the price of a Ford.

The inevitable conflict brought the project to the brink of collapse several times, twice forced the Bank of England to intervene to prevent Eurotunnel's bankers pulling the plug, and twice obliged Eurotunnel to refinance.

Even before the first piece of rock was cut under Shakespeare Cliff, Kent, in December 1987, Eurotunnel had been forced back to its banks for stop-gap funding, and mutterings of discontent over escalating costs had begun to emerge from the contractors.

The first full year of construction was a nightmare. The five contractors on the UK side hit unexpected geological problems and by the end of 1988 only 4 per cent of the tunnel had been dug. Time-scales began to slip and costs began to escalate.

TML caught up in time for the two teams of tunnellers to break through from opposite sides in December 1990 - but the price was high in human and financial terms. Nine workers had died and the cost was up to pounds 7.5bn.

So poisonous were relations between contractor and client that in the space of a year the top managements of both Eurotunnel and TML were cleared out and replaced in an effort to heal the breach.

It worked temporarily. But the cost of digging the tunnel was soon to be dwarfed by an more damaging row over the cost of fitting it out. The dispute burst to the surface in July 1991 when TML submitted a claim for pounds 1.4bn.

The ensuing row dogged the project for two years and saw the contractors and Eurotunnel in and out of the French courts as they fought piecemeal battles over every kilometre of railway track and electrical cable laid under the Channel.

In the meantime, Eurotunnel was in dispute with the British and French governments for failing to provide adequate rail links, with the consortium building the shuttle trains over the cost of the fleet, and with British Rail and the French operator SNCF over delays to the start of through-rail services.

In all the conflict, the achievements of the last seven years have rather been overlooked. It has been Europe's largest single construction project - employing 15,000 at its peak - which has produced Europe's longest tunnel, housing one of the world's most advanced and complex railways, with the capacity to handle a forecast 45 million passengers and 26 million tonnes of freight a year by 2000. Eurotunnel's task is to make it work.

(Photographs omitted)

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Recruitment Genius: 3rd Line Virtualisation, Windows & Server Engineer

£40000 - £47000 per annum: Recruitment Genius: A 3rd Line Virtualisation / Sto...

Recruitment Genius: Refrigeration and Air Conditioning Service Engineer

£26000 - £35000 per annum: Recruitment Genius: A successful national service f...

Recruitment Genius: Business Development Executive / Sales - OTE £25,000

£15000 - £25000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Sales Administrator - Fixed Term Contract

£17500 - £20000 per annum: Recruitment Genius: We currently require an experie...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?