20 Years of the Chunnel

[marmar]

(The Economist) QUEEN ELIZABETH gamely saluted “la combinaison de l’élan français et du pragmatisme britannique”. President François Mitterand countered with a courteous nod to Britain’s help in two world wars. A centuries-old dream of connecting Britain to France was formally realised on May 6th 1994 with the opening of Eurotunnel under the English Channel, la Manche.

But the project, so inspiring on the drawing board, was a nightmare on (and under) the ground. It cost twice as much to build as budgeted. Even 20 years on, only half as many people use it as were expected to. A first dividend to shareholders, promised in 1995, was paid in 2009. By that point the 750,000 investors, mainly French, who poured their savings into shares had seen most of them vanish in the restructuring of Eurotunnel’s unpayable debt in 2007.

Slowly, however, Eurotunnel is coming good. As Britain’s economy grows, it is pulling the company up. In 2013, 20.4m people used the tunnel, either in their own vehicles aboard the tunnel shuttle or as passengers on Eurostar’s high-speed trains. The year before it was 19.9m. Rail freight increased, too. Revenues in 2013, at €1.1 billion ($1.5 billion), were 12% higher than in 2012. Next year Eurotunnel, which is headquartered in Paris, may begin to pay French corporate-profits taxes.

Even now, the tunnel is operating at only a bit over half of its capacity. But the next two decades are likely to transform it from a useful bilateral link into a thoroughfare through which the rest of Europe can travel. The reason is more competition. ..............(more)

The complete piece is at: http://www.economist.com/news/business/21601882-bad-project-comes-goodwith-better-yet-store-next-20-years

[Agschmid]

1. Great read.

I get to try it out in August!