Eurotunnel ‘Perfect Example of Rail Finance Madness

30 June 2005

Keith Norman, the acting General Secretary of ASLEF, said today that the lunacy of rail financing was spelled out perfectly by last weekend’s outbreak of economic anarchy at Eurotunnel – and he supported those on the board calling for state intervention.

‘Within the last few days the company chairman has resigned - but somehow stays on the board. Creditors are baying for money - which they know does not exist. And while half the board bickers about re-financing, another is calling on the government to write off Eurotunnel’s £6 billion debts. 

‘With direction like this, it is a miracle the trains find their way through the tunnel at all!’

Keith says Eurotunnel demonstrates all the lunacies of rail financing. “Vast projects of this type need central funding, working to well understood and publicly approved goals,” he said. “Leaving everything to ‘the market’ is massively irresponsible and ultimately unsuccessful.” He called for the ending of the Treaty of Canterbury, which paved the way for the building of the tunnel - and specifically ruled out state aid for the project.

Keith supports French director Joseph Gouranton who says it is ‘unthinkable’ that the French and UK governments will stand by and watch the collapse of Eurotunnel. Gouranton says it is ‘inconceivable’ that Eurotunnel remains in private hands. 

‘How much more evidence do we need before we realise the self evident truth of this view?’ Keith demanded. 

Eurotunnel’s lenders, who include MBIA, HSBC and the European Investment Bank, said they were eager to get talks on restructuring started soon – but as the union points out, the company obviously has no money. Adding to the confusion, the group’s chairman Jacques Maillot resigned on Friday. He had been in post for less then a year, and will be replaced by another non-executive director, Jacques Gounon.

‘It really is time the company stopped playing a ludicrous game of musical chairs and took some logical decisions,’ says Keith Norman. ‘The first decision must be to take Eurotunnel out of the area of private finance and free market dogma. Then it can begin to provide clean, reliable and fast transport across the Channel – which is what the public wants.’

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