Bad news this month for the UK’s Channel Tunnel operator, Eurotunnel (p13). Chief executive, Richard Shirrifs, has recently all but admitted in the UK press that the company could go bust, just 10 years after the tunnel’s grand opening. The problem is fundamental – the tunnel, which could feasibly go down with the operator, simply isn’t paying for itself.

This month Eurotunnel posted a net loss of US$2.4bn and struggled to meet it’s crippling interest repayments. The fact is these interest repayments are 10% higher than the tunnel’s earnings, ominous considering the capital repayments on the debt are due from 2006.

Recent reports indicate that almost 66% less traffic is frequenting the tunnel than initially predicted, echoing past chief executive, Sir Alastair Morton’s accusations that if the train companies had originally forecast tunnel use accurately, it would have never been built.

There have been plenty of reasons for the traffic no show – cheap flights, competitive ferry companies, illegal immigrants, even the duty-free clampdown – preventing the English hoards stocking up on cheap continental lager, wine and cigarettes.

However, the finger of blame is increasingly pointing towards a fatally flawed business plan all those years ago and it is starting to look more and more as though the tunnel’s predicted usage figures were wildly optimistic.

Fresh hope could come from the UK’s proposed ‘Central Railway’ freight line, which advocates the use of the Channel Tunnel, as well as a new 13km long tunnel, as part of a new high-speed freight link between Lille, in France, and Liverpool, in the UK’s north.

As well as boosting the cash strapped Channel Tunnel, the scheme, that is predicted to remove up to 10,000 trucks per day from London’s gridlocked M25 motorway, will provide another large scale project for a domestic tunnelling industry plagued by boom or bust.

That is, of course, if Crispin Blunt, MP for a constituency close to the proposed new tunnel can see past his backyard.

Whilst advocating transferring trucks to rail, he believes the tunnel’s construction phase would be “monstrous” (p8) and is thoroughly against the whole link. It could be time to take a look at the bigger picture Mr Blunt.

Tris Thomas