5 replies to this topic

[Lance Winslow]

Does anyone know the latest on the Euro Tunnel and the Debt Financing Issues? What will be done. This is what happened last year;

The Euro Tunnel is now bankrupt, but it has a new leader to take over. A couple of years back the entire board of the EuroTunnel was sacked and a new board installed. Now we have a new boss at the helm; who comes in as the cash dry Chunnel Operation hits the end of the line. They are out of money.

Will the British be isolated again from the rest of the European Continent? The EuroTunnel has never made any money, never turned a profit. The investors where shown really impressive proformas, which would put Enron to shame. As a matter of fact if this were in the United States the operation would have been sued into oblivion by investors, State’s Attorneys Generals and Regulatory Bodies. But this is European business and things are done differently there. So there is a chance that this EuroTunnel may now have a turn-around King installed to talk over and fix the problem without the lawsuits.

Today the Tunnel is 12 Billion in debt. Jean-Louis Raymond resigned and of course all the shareholders want their money back? Wouldn’t you? But why did such a good idea fail? Is it because humans do not like to drive underground for 21 miles? Or because no one wants to take a train-ride underground at 100 miles per hour, just to come up and be forced onto an English rail system of 40-60 mph at best? There is a Semi-Fast line going to the London Suburbs, but the rest of the relay is slow and cumbersome indeed. Part of the issues was that the Ferries implemented a price reduction strategy to deal with the competition to lower the costs.

Additionally if someone from London wishes to go to France by car, they still have the car when they get there and driving a car is nightmare there and the Chunnel costs are not cheap. You could fly for about $55.00 or so from London to anywhere in Spain, Italy or France. Are we seeing a trend in the world with transportation issues? Will the EuroTunnel survive simply thru subsidies in transportation? If so, why not make it free to travel and really open up the trade routes? After all if the EU is serious about having everyone on board then, they need to be thinking here? Picking up the assets out of bankruptcy cannot be too bad? But presently it is a complete and utter failure and a dismal fiasco. Think on this.

[b3nr]

Lance Winslow, on Dec 6 2006, 11:55 AM, said:

Will the British be isolated again from the rest of the European Continent?

We can only hope!   I joke of course...

The firm may go bankrupt, but the service will remain. I beleive, and i may be wrong, but EuroStar is making money, its the tunnel operator and Eurotunnel which isn't. The problem is not that the link is not being used, it most certainly is. Its the massive, huge, unnimaginable amount of debt the company is lumbered with.

Eurostar trains have more or less killed off the London to Paris air route, but onward travel from these two destinations (especially in the UK) is slow (compared to plane) and expensive.

The privatised track operator that run the UK's railways went bankrupt a few years ago. Did services cease? Of course not. The project is now too important, and symbolic for that to be allowed to happen. Bad news for the shareholders but as a passenger as long as the service remains... who cares?

And yes your correct, it was quite asmusing shooting up to Calais and on to the end of the tunnel at 180mph and grinding down to 40-60 passing through suburban stations of London using ancient third rail power!

Actually i seem to remember hearing the Tunnel was nearing capacity already, so it is popular...

Edited by b3nr, 06 December 2006 - 08:40 AM.

[Lance Winslow]

Wow, near capacity and the Euro Tunnel getting feeded with all that traffic is still going bankrupt, that is problematic.

[frankliner]

Lance Winslow, on Dec 6 2006, 11:36 PM, said:

Wow, near capacity and the Euro Tunnel getting feeded with all that traffic is still going bankrupt, that is problematic.

Here is an International Herald Tribune article from this year about the bankruptcy. Obviously it's still running though. http://www.iht.com/a.../eurotunnel.php

[Snowguy716]

While the Euro-tunnel may not be profitable itself, might it not make sense for the government to subsidize it because of the economic benefit it provides via much faster travel between continental Europe and the UK?

I think Britrail is a prime example of what happens when you privatize public transportation.  I've never ridden British Rail because every time I tried, they had cancelled service for the day to make some repairs to the track.

[b3nr]

Could'nt disagree with you there Snowguy!

Britain is the number one example of why privatising public transport is rarely a good idea...

Bus riderships is down year on year, every year since 1988, railways are astonishingly expensive. It makes cry.

There have a number of stuides on the wider economic benefits of the euro tunnel, none of which i can find :s They conclude, as you do, that the wider benifts out-way the ammediate costs.