Tunnel rail link put back another two years

THE CHANNEL tunnel rail link will not be completed until the end of 2002 at the earliest, two years later than previously hoped, following yesterday's government announcement of how it intends the link to be financed.

It means that Channel tunnel trains will have to run on existing lines for at least seven years after the start of freight operations next March and passenger services in late summer.

Union Railways, the British Rail subsidiary charged with building the 68-mile link between St Pancras and Folkestone, had hoped that a parliamentary Bill for its construction could have been introduced in March 1994. However, John MacGregor, Secretary of State for Transport, said yesterday that he wanted to involve the private sector at a much earlier stage in the design and preparation of the link and would put out tender documents inviting bids to build the line in the spring.

The tender that requires the least government money to fund the link, likely to cost about pounds 3bn not including the stations, will be accepted. This means a Bill cannot be introduced until late 1994 at the earliest, and, according to industry sources, probably well into 1995.

Some private sector sources were sceptical of this way of attracting private finance. One said: 'They might say they need only a few hundred million but when it comes to the crunch, they might need a lot more. And then what will happen?'

Mr MacGregor described the Bill, which will have to be 'hybrid' as it involves both public and private sector interests, as 'probably the most complex such Bill ever' which is likely to require a minimum of two years in Parliament.

The line was first mooted in 1987 and subjected to a series of government policy changes. These further delays mean that at least 10 years will have passed before work, expected to take five years, can start.

As a sweetener to attract private companies, which are expected to include Ove Arup and the Eurorail consortium that includes Trafalgar House, the winning consortium will obtain the revenue from European Passenger Services which will operate the trains between Waterloo and Paris and Brussels. The fate of its pounds 1.4bn assets is unclear, but these are likely to be written off.

Union Railways, which employs 450 people, is to be separated from British Rail in the near future, becoming a separate government company and eventually part of the consortium building the link. Union Railways was due to run out of funds in March next year but Mr MacGregor has promised it will have sufficient money to enable it to continue preparatory work.

The chairman of Eurotunnel, Sir Alastair Morton, said yesterday: 'We are terribly disappointed at further delays. There is a lack of urgency in introducing the Bill.'

Frank Dobson, Labour's transport spokesman, said the Government's dithering meant people in the affected area faced more years of uncertainty.