Hot Potato

20 February 2004 By Fiona Maharg-Bravo

Help the crossChannel tunnel operator out and you could get valuable contracts for a big London rail project, seems to be the message. Nothing better illustrates Eurotunnel s dire plight.

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London & Continental Railways (LCR), the builder of the Channel tunnel rail link and operator of the UK arm of the Eurostar train service, is considering proposals to hand part of the rail link to tunnel operator Eurotunnel. The UK government might link LCR's cooperation to its chances of winning contracts to build Crossrail, the £10bn projected crossLondon rail link, according to the Financial Times.

Eurotunnel has £6.4bn of debt, including a £1.5bn stabilisation facility. After a decision to reduce access charges in order to boost demand, it won't have enough cash to start making capital repayments to its banks in 2006. It has called on the UK and French governments as well as industry partners to help shore up its finances.

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