It was only in 2007, following a second financial restructuring that devalued equity and restructured debt, fortuitously at the same moment as the long delayed high-speed rail line into London (HS1) was completed, that Eurotunnel transitioned towards financial sustainability.
Construction delays, cost overruns and demand for services far below forecast, combined with a massive debt burden meant that Eurotunnel, the private company running the project, stumbled from financial crisis to financial crisis over the following decade. Only months after opening on the Chunnel was already being labelled a ‘failure’. 2019 sees the 25th anniversary of the start of operations of the Channel Tunnel, hereafter the Chunnel, one of the most iconic transport infrastructure megaproject of the 20th century and one that was delivered entirely by private finance. Just as history told by the victors may not be entirely reliable, megaproject history told by investors who lost money may lead to a persistently biased narrative. Introduction: a megaproject ripe for re-assessment With perfect 2020 hindsight on demand risks and cost overruns, a public sector investment subsidy of around 50% of the capital costs would have been required to make the project financially attractive to private investors, whilst generating an economic rate of return over the life of the concession estimated between 3 and 6%.ġ.
#English channel tunnel how to#
The Chunnel made a significant contribution to modernising Europe’s transport infrastructure on its journey towards sustainability and in improving knowledge about how to deliver privately financed megaprojects through public-private partnerships. This paper takes a holistic, multi-disciplinary, multi-stakeholder long run perspective to dig beneath the iron triangle to argue that the Chunnel was not just an extremely successful megaproject that has delivered real economic benefits, but also an important agent of change. If one looks beyond the so-called ‘iron triangle’ criteria of keeping to time, cost and scope, and the project’s early financial troubles, reality looks rather different. Some authors even suggest that it should never have been built. Despite nearly 25 years of successful operation and growing profitability, the Chunnel is frequently portrayed as a failure. The Channel Tunnel project (the Chunnel) to connect the UK and France was the largest privately financed transport megaproject of the 20th century.
0 kommentar(er)
