Newspaper article The Christian Science Monitor

Project Hits Steep Overruns

Newspaper article The Christian Science Monitor

Project Hits Steep Overruns

Article excerpt

SIR Alastair Morton, chief executive of Eurotunnel, the Anglo-French consortium that will operate the Channel Tunnel, will be an anxious man until October next year, when the fixed link is due to open.

His organization is in head-on collision with Transmanche Link (TML), the association of British and French contractors building the tunnel, about project cost overruns totaling an estimated $2.2 billion. Last month Sir Alastair, a former World Bank executive, warned of further delays in the Chunnel's opening date if arguing about who should shoulder the extra cost does not cease.

"This is a poker game," he said. "There is a threat to the completion date from the posturing of contractors. Games-playing can slow down progress."

Sir Alastair already is upset that the Chunnel's original target-completion date - June next year - will not be met because of earlier hold-ups in the boring program.

On the other hand, what will have been achieved when the bickering and financial nail-biting are over is breathtaking. Four types of trains will use the Chunnel:

* Tourist shuttle trains, 28 cars long and traveling at 80 m.p.h. between terminals at Folkestone and Coquelles, will carry cars and their passengers.

* Freight shuttles will haul heavy goods.

* Passenger trains - up to four an hour - will speed between London, Paris, and Brussels.

* Long container trains will carry bulk freight between centers in Britain and mainland Europe.

To satisfy the 220 banks that have extended $14.5 billion in credit to Eurotunnel, Sir Alastair and his colleagues have had to make firm forecasts about traffic.

Tunnel researchers expect 28 million passengers to use the tube in the first year, and 44 million by 2003. Forecasts set tunnel use at 16 million tons of freight after 1993, and 27 million a decade later. If these targets are not met, Eurotunnel will have trouble earning the returns necessary to repay its debts. Fares will have to be raised, and Sir Alastair concedes this might improve the ability of the ferry companies to compete. …

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