
<DOC>
<DOCNO>
WSJ900615-0131
</DOCNO>
<DOCID>
900615-0131.
</DOCID>
<HL>
   British Government Says It Won't Help
   Fund High-Speed Rail Link to `Chunnel'
   ----
   By Barbara Toman
   Staff Reporter of The Wall Street Journal
</HL>
<DATE>
06/15/90
</DATE>
<SO>
WALL STREET JOURNAL (J), PAGE A5J
</SO>
<CO>
   EUROP U.EUR
</CO>
<IN>
MASS TRANSIT, BUS LINES, SUBWAYS, HIGHWAYS (TRA)
RAILROADS (RAI)
</IN>
<LP>
   LONDON -- A shadow is falling across the light at the
British end of the Channel Tunnel.
   Just as prospects brighten for the beleaguered "chunnel,"
Britain risks failing to take full advantage of the
cross-channel link. The Thatcher government's announcement
yesterday that it wouldn't help fund a high-speed rail link
between London and the tunnel has fueled fears that the
country's creaky transportation system will isolate Britain
on the periphery of Europe.
</LP>
<TEXT>
Sarah Talbot-Williams, a spokeswoman for the Confederation of British Industry, Britain's main employers' group says, "1992 is going to produce a much more competitive market. "If we don't have the infrastructure to get the goods to Europe, we'll continue our status as an island."

Long plagued by soaring costs and drilling delays, the tunnel now looks set to open on time in June 1993. British diggers, who once lagged months behind schedule, currently are just one week behind; their French counterparts are running three months ahead of plan. And although the project's estimated cost has soared to #7.66 billion ($13.11 billion) from #4.9 billion, tunnel executives have obtained underwriting for an equity rights offer and preliminary agreement for more bank loans to cover the added cost.

"There will be no more talk of crisis," says Alastair Morton, chief executive officer of Eurotunnel PLC, the consortium building the cross-channel link. "The money will be together this year, and the project will be clear from there."

But the lack of a high-speed rail link to London, and improved service beyond, means Britain may miss out on the tunnel's total benefits. "There is a danger of not being able to exploit the tunnel to its full potential," says Prof. Christopher Nash, a transport expert at Leeds University in Northern England.

The government's refusal to help fund a fast rail service between London and the tunnel terminal at Folkestone culminates an 18-month squabble. European Rail Link Ltd., a consortium formed last November to build the rail link, had asked the government to contribute #350 million towards the total #2.6 billion cost of the link.

Transport Secretary Cecil Parkinson told the House of Commons that the consortium's plans involved "unacceptable" risks for taxpayers. He said British Rail, which owns 50% of the consortium, would consider other options for a fast-rail link. But no one expects a viable scheme anytime soon.

Defending the decision, Mrs. Thatcher earlier told Parliament that the government already had earmarked almost #2 billion for chunnel-related projects, including #600 million on roads leading to the tunnel and #1.3 billion in passenger and freight rail services.

But that didn't satisfy opposition legislators. "Britain will enter the 21st century with an inadequate 19th-century railway link," said John Prescott, the Labour Party's transportation spokesman.

As a result of Thursday's decision, the journey time to London from Paris will be about three hours -- 30 minutes longer than with a high-speed rail link. Passengers boarding high-speed trains in Paris will zoom at 180 miles an hour north to Calais, slow to 100 miles an hour through the tunnel, then crawl at an average of 60 miles an hour across southeast England's crowded commuter belt.

"The traffic will now speed through as far as our side of the tunnel, and then the men with red flags will lead it on to London," complains Keith Speed, a Conservative member of Parliament whose constituency is near the tunnel terminal.

Eurotunnel insists the tunnel will be financially viable without the high-speed rail link. The tunnel-building consortium argues that only 39% of its total revenue will come from direct London-to-Paris trains; the real money-spinner will be freight traffic hauled by road to the tunnel, then loaded onto special Eurotunnel wagons for the journey under the channel.

"We make more money on road traffic using our tunnel," Mr. Morton says. "There is in no sense a feeling we must have that link to make the tunnel successful."

But Mr. Morton admits he wants to see the high-speed link built, professing it would divert traffic from southeast England's clogged roads. The high-speed link "will be a benefit for us," he says, "but essential for the country." 

Some analysts go further, arguing the tunnel indeed needs better rail links if it is to compete with improving ferry and air services. "A high-speed link which covers {only} part of the route proves to be fairly uncompetitive with other transportation modes," says Bill Steinmetz, vice president of transport for consultants Booz-Allen &amp; Hamilton Inc. in London. "If you're going to build high-speed rail, you have to decide how to provide complete links. It's like having part of a house built. It may function, but you do worry about it."

The worries don't end in London. North of the capital, industrialists fear poor railway links will isolate them on the fringes of the European Community's single market.

"The Channel Tunnel is a marvelous addition to the infrastructure," says David Merrill, corporate-affairs director at Pilkington PLC, the big glass maker based in St.Helens in Northwest England. But "it's important that the quality of the rail network and capacity is improved. I don't think there's any time to lose."
</TEXT>
</DOC>

