Leading article: Thank the banks for our tunnel

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The Independent Online
There is a rumour that Sir Alastair Morton, the chairman of Eurotunnel, may be one of the last members of a lonely band of international socialists known as Trotskyites who stand outside shopping centres on a Saturday morning selling propaganda sheets and railing against the power of international banks. Sir Alastair has been far more successful in hitting international finance capital where is hurts than a century of angry Marxists. He has borrowed huge sums from the banks, between pounds 8bn and pounds 9bn is the latest estimate. Yesterday he confirmed what they already knew: that he would not be able to repay much if any of the interest, let alone the principal.

Sir Alastair's place in history is assured. Arrogant and domineering, with a huge appetite for rows, nevertheless he has got the tunnel built and operating without the taxpayer stumping up the money. There has always been a suspicion that Sir Alastair believed the important thing was to get the tunnel built; how it was paid for would be a side issue.

It will not feel like a side issue for thousands of private investors who have lost their money. One once fashionable broker's theory was that the tunnel would be like a property investment: a large loss at the outset would be more than offset by steady rental income and a rise in the value of the asset. Instead it has turned into a bottomless pit.

Many of the banks will rue the day they ever opened their doors to Sir Alastair, especially the hapless Japanese banks, who bought into the project mainly to please their political masters in Tokyo.

The travelling public have good reason to be happy. We have an excellent tunnel and more competition across the Channel, which is driving down prices. In the long run the symbolic and cultural value of the tunnel to European integration may be huge.

We may yet pay however, if the calamity of the tunnel makes it more difficult to mobilise private finance for public investment. Private finance helps to inject cost discipline. Had the tunnel been built with public money the cost over-runs would have been far greater. And eventually we will pay because the banks will find some way of passing on the costs. But for the moment we should sit back and bask in the wonder of Sir Alastair's achievement of persuading the banks to buy us our wonderful new tunnel.

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