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Eurotunnel accepts £40M claim settlement

CHANNEL TUNNEL contractor TransManche Link has settled all of its claims with operator Eurotunnel.

TML will now pay £40M to Eurotunnel in a final settlement believed to relate to the delivery of faulty shuttle trains.

Each of TML's British members - Balfour Beatty, Costain, Tarmac and Taylor Woodrow - will pay Eurotunnel £4M with the exception of Tarmac which will pay £8M, having taken on TML member Wimpey's liabilities with its construction operations as part of its 1996 asset swap.

The settlement follows the rejection last year of a £1bn claim from Eurotunnel by the independent Panel of Experts set up to mediate disputes between the two sides. The Panel had told Eurotunnel and TML to negotiate a smaller compensation payment instead (NCE 8 May 1997).

In a separate development the British and French governments have granted Eurotunnel a 34 year extension to its Channel Tunnel operating concession.

Eurotunnel had banked on the prospect of an extended concession to win support from small shareholders for its financial restructuring programme.

In return Eurotunnel will pay the British and French governments 59% of its pre-tax profits after 2052 - the year when the existing concession expires.

Eurotunnel has also agreed to hold down charges to freight train operators to encourage increased use.

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