Taxpayers face 2bn pounds bill for Channel link

BRITISH RAIL is to tell the Government that up to pounds 2bn of taxpayers' money will be needed to build the high-speed Channel tunnel rail link.

Ministers had hoped the project would be financed largely by the private sector. But BR has concluded that up to two-thirds of the estimated pounds 3bn cost will need to come from public funds.

This will pose a dilemma for the Government, which is facing its toughest public spending round in years and criticism over its reluctance to finance rail projects such as the Jubilee Line. The near-certainty of Treasury opposition could delay the project into the next century.

BR hopes to launch a three- hour London to Paris service before the end of the decade. If the line is not built by then BR says it would have to turn away up to

4 million passengers a year.

A year-long study by Union Railways, the BR division responsible for the link, is understood to have identified savings to trim costs from initial estimates of more than pounds 4bn. But its report, due to be submitted to John MacGregor, Secretary of State for Transport, in early December, is expected to say pounds 1.5bn to pounds 2bn of public money will still be needed.

In October last year the Government rejected BR's preferred route for the 68-mile link into King's Cross station through south London in favour of an easterly approach via Stratford.

At the time Mr MacGregor's predecessor, Malcolm Rifkind, told BR: 'It is the Government's intention that the rail link should be taken forward by the private sector. As to the precise financial arrangements, this will be for the Government to decide in the circumstances at the time.'

BR will argue, however, that the private sector is unlikely to put up the full pounds 3bn since it would not be able to earn a commercial rate of return.

Only a third of the link's capacity will be taken up by profitable high-speed passenger services and limited freight operations. The remainder will be used by Network SouthEast to improve commuter services and cut journey times from the Kent coast. BR will say that justifies public funding.

The project needs government approval by next March to allow BR time to conduct a six-month public consultation and submit a Bill to Parliament by December 1993. Construction would start in spring 1995 and the link would open in late 1999.