BRITAIN'S FIRST high speed railway, the Channel Tunnel Rail Link, is certain to face delays following a funding collapse which hit the project just days after the first major tunnelling contracts were awarded (GE February). The construction project is the biggest in the UK and any delays or changes are likely to impact heavily on both the construction and economic sector.
The future of the high profile link was thrown into doubt after Deputy Prime Minister John Prescott refused to release additional public funding to the consortium for the link on the 27 January.
London & Continental Railways had asked for an extra £1.2bn of public money to run the railway over the next 10 years, after passenger rev- enue predict- ions showed a shortfall of £2.5bn.
The government had already agreed to give LCR (Bechtel, Hal- crow, Ove Arup, Virgin, National Ex- press and Systra) £1.8bn to run the railway bet- ween the Channel Tun- nel and London's St Pancras stat- ion. Construction of two of the London tunnel sections of the £5.4bn link was due to start at the end of the year.
As Ground Engineering went to press, LCR was still battling to keep the link alive, after Prescott gave the consortium 30 days to submit a rescue package. If this is not forthcoming by the end of February, the government has the option of taking the project over, scrapping it or putting it out to re- tender.
LCR is understood to be considering a two-phased construction programme, which will add further delay to completion of the link but may allow the government to make a graceful U-turn and release public funds at a rate which makes the project viable.
The crises has raised fundamental issues concerning the viability of private investment for major infrastructure transport projects. Many city financiers have commented on record that the project, under its original financing structure, was never going to gain the support of the City as the huge investment in construction costs could never be justified in terms of even the most optimistic revenue projections.
Nevertheless LCR Railtrack, the company that owns and maintains Britain's railway infrastructure, has expressed a muted interest in taking the project over or at least buying a controlling stake. Re-tendering may yet occur as others have also expressed interest.