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L&C in rail link talks with DoT

THE competition to build the 3 billion Channel Tunnel Rail Link intensified this week with London & Continental claiming it is having exclusive talks with the Department of Transport (DoT).

But rival bidder Eurorail said it was still in the running for the project, the most important scheme to be let under the governments Private Finance Initiative.

The winner of the project is due to be announced within the next two weeks.

The losing bidder faces a bill of up to 20 million to cover tendering costs alone.

The start of the project will bring welcome relief to the hard-pressed civil engineering industry, with 15,000 jobs being created during construction.

The 108 km route will run between Kings Cross in London and the Channel Tunnel terminal at Folkestone.

It will include a total of around 25 km of tunnelling, with long tunnels under London and shorter tunnels to reduce the environmental impact in the Kent countryside.

The London & Continental consortium, which believes it is close to victory, includes consultants Ove Arup and Halcrow, US construction giant Bechtel, merchant bank Warburg and operators Virgin and National Express.

These firms have broadly equal shares in the project. London Electricity and SNCFs consultancy arm, Systra, are acting as specialist advisers.

If they win the job, the construction work will be put out to competitive tender, with Bechtel managing the project.

A source at Eurorail said there was no truth in London & Continentals claim to exclusivity.

The key difference between the consortia is Eurorails emphasis on construction.

The latters line-up includes five equal shareholders: Balfour Beatty parent BICC; Trafalgar House; Seeboard; and banks HSBC and National Westminster.

The DoT refused to comment on whether the competition had reached the stage of exclusive negotiations.

A spokesman said: The negotiation process is confidential but a decision has not yet been made. The negotiations are on-going.

The winner will be the consortium asking for the smallest amount of public subsidy.

It will also be given European Passenger Services, which runs Eurostar trains to the Continent, to provide a revenue stream to help fund construction of the high-speed route.

A wave of redundancies for the losing bidder is almost certain to follow the award of the contract.

If Eurorail takes second place, its contractor members, Balfour Beatty and Trafalgar House, will be able to bid for packages of work when Lonodn & Continental puts construction work out to tender.