Channel Link: Project dogged by doubts and delay

The project to build a Channel tunnel rail link has been jinxed ever since the idea surfaced more than 20 years ago. Michael Harrison looks at the history of an ill-fated project.

The first stab at designing a high-speed link from the Kent coast collapsed in 1975 after the government of the day decided not to proceed with the Channel tunnel itself.

A decade later the project resurfaced. British Rail began design work on a link in the mid-1980s and stepped up project planning when Eurotunnel began the construction of the tunnel in 1987 following the signing of the Channel Tunnel Act.

BR came up with three routes into central London. The Thatcher government of the day selected one which entered the capital via a southerly route ending at a terminal at King's Cross. Mrs Thatcher decided it should be entirely privately financed, partly because she did not trust BR to build the link on time and on budget, partly because it was too uncertain a venture to risk taxpayers' money.

After a private-sector competition, Eurorail, a partnership between the construction groups Balfour Beatty and Trafalgar House, advised by Kleinwort Benson, was chosen to build the 68-mile link. The estimated cost was then pounds 2.6bn. However, Margaret Thatcher and her then transport secretary Cecil Parkinson balked at the government guarantees being sought by the consortium, declaring that the private sector was asking for an "open cheque" and cancelled the project in June, 1990.

Five years later, with Baroness Thatcher gone, the rail link was back on the agenda. But this time the line would enter London from a different direction. In his desire to regenerate the East Thames corridor, Michael Heseltine, the then deputy prime minister, championed a route devised by consulting engineers Ove which brought the line into St Pancras station via north Kent and Essex.

Eurorail decided to reform, this time with Mr Parkinson acting as its chairman, to rebid for the project in competition with three other consortia. Two other contractor-led groups, Union Link and Green Arrow, quickly fell out of the bidding, leaving it to a straight fight between Eurorail and London and Continental Railways.

By this time, the capital costs of the construction alone had escalated to pounds 3bn while total project costs, including financing charges, put the bill nearer pounds 6bn.

Eurorail had by now added another three backers to its consortium - HSBC, NatWest and Seeboard. Its costings and revenue projections for Eurostar were much more cautious. Eurorail told the Government it would need pounds 1.7bn in subsidies (at 1995 prices) because it did not believe that Eurostar would be carrying more than 6 million passengers in 1998. LCR asked for pounds 1.2bn in support, estimating that it could make up the shortfall from passenger revenues. Its confidential bid assumed 10 million passengers a year by 1998.

With the collapse of LCR's plans in the face of John Prescott's refusal to provide further public funding, history is repeating itself. While the France and Belgium have built their high-speed links to the Tunnel, industry observers here are wondering whether Britain will ever have its own dedicated link. The suspicion yesterday was that the project may end up being shelved for another five, perhaps 10 years unless Mr Prescott agrees to dip into the taxpayers' pocket.