Twenty years old : happy birthday Eurotunnel

Analysis of Mediarail.be - Signalling technician and railways observer

This Tuesday, we celebrate the 20 years of Eurotunnel. A dream of 200 years became a reality on May 6, 1994 with the official opening of the Channel Tunnel by the Queen Elisabeth and french President François Mitterand. The Queen took the first highspeed British train to use the tunnel and arrived in Calais at the same time as the French president's train from Paris. That ended the insularity of Britain, although the British people do not feel at all the things like that.

We have come a long way ! The first project was imaginated in 1802 by French engineer Albert Mathieu-Favier put forward the first ever design for a cross-Channel fixed link based on the principle of a bored two-level tunnel. The real first test was attempted in 1973 : the construction and the operations of a railway tunnel under the Channel is finally launched at Chequers by Edward Heath, British Prime Minister, and Georges Pompidou, French President, when a Franco-British Channel Tunnel Treaty was signed. But in 1975, Harold Wilson, British Minister, announced that the project is stopped and withdrawn for financial reasons and in particular due to the oil crisis. But the truth lies elsewhere. As reported the Express.co.uk « An island is an island and should not be violated, wrote Labour Cabinet minister Barbara Castle when the scheme was dropped ».

Project was relaunched in 80’s when Mrs Thatcher came to power in 1979 at the head of a new Conservative government. A study conducted in 1984 by a group of British and French banks had ruled on the economic viability of the project, despite its enormous size. Thatcher wanted a road tunnel, Mitterrand a railway tunnel due to more security. In 1986, Margaret Thatcher and François Mitterrand announced in Lille that the Eurotunnel bid presented by a Franco-British Consortium « France-Manche-Channel Tunnel Group », has been selected. The Channel Tunnel is a railway tunnel (French requirement), but his construction is only made by a private consortium (british requirement). Eurotunnel, who manages and operates the Channel Tunnel, is holding the Concession until 2086.

Conception
There are two 7.6-metre diameter rail tunnels, one by direction, plus a central tunnel for safety. Tunnel « South » go from France to England, the « North » tunnel for the reverse direction. The length of the tunnel is exactly 50.5 kilometres long between the portals at Beussingue and Castle Hill, but the exact length under the sea is 37.9 kilometres long.  Power is delivered to the trains via a catenary at 25 kV 50 Hz, and the train protection is provided by the French cab signalling system TVM430 (used by French TGV), given information directly to train drivers on a display screen on board. Two control centers manage the rail traffic on the both side, one british and one French, where there are also extensive surface-level terminal facilities and marshalling yards at Frethun in France and at Folkestone in the UK, as shown picture below.

 Folkestone terminal and departure of a truck shuttle (par Ed Clayton via Flickr CC BY 2.0)
Operations
Many people are still confused between Eurotunnel and Eurostar ! Eurotunnel is a railway shuttle service for road transport : cars, trucks and bus which are loaded on special shuttle via a terminal facilities. The service is only provided between terminal at Calais-Fréthun and Folkeston (50 km). No shuttle go to London or Paris ! Eurostar is a passengers railway company which don't provide any shuttle services but well a railway services by high speed train between the « three capitals », Paris, Brussels and London, and, in the future, to and from Amsterdam (2016). There is therefore three different traffic in the tunnel : shuttle for road clients by Eurotunnel, international trains for rail passengers by Eurostar,  plus freight trains but at very low quantities.

 Boarding in a car shuttle (par dvdbramhall via Flickr CC BY-NC-ND 2.0)
The finances : a troubled history
That was the sine qua non requirement of Thatcher : no public penny for the tunnel. The result was that on May 6, 1994, the final cost of the biggest tunnel in the world  reached 80% more over that its predicted budget of nearly £5billion. Financing costs were 140% higher than forecast because heavy interest charges on its £8bn of debt.

Financial situation became the main topic of conversation for the first ten years. The traffic of Eurostar and more espacially the freight services were largely surestimated. Revenue was dramatically less than expected : the question of the debt and the relation with creditors became highly critical. Losses incurred by many little shareholders is making life unbearable for Eurotunnel. 

In 2004, a dissident shareholder group succeeded in taking control of the board and, in 2005, the french Jacques Gounon took complete control becoming Chairman and Chief Executive. Despite a deal voted by shareholders in 2006, french court has placed Eurotunnel into bankruptcy protection. As reports Wikipedia, in May 2007 a new restructuring plan was approved by shareholders whereby Deutsche Bank, Goldman Sachs and Citigroup agreed to provide £2.8bn of long-term funding, the balance of the debt being exchanged for equity, and the shareholders agreed to waive the unlimited free travel and other perks that they had enjoyed. Following the restructuring, Eurotunnel was finally able to announce his first but  small net profit in 2007 and the return to financial health allowed to the company to announce in 2009 the anticipated voluntary redemption of some of its convertible debt. The financial story seems now to go to more quiet waters...

Today
Eurotunnel reports a traffic reaching 10 millions passengers by shuttles of cars and bus, plus 17.7 Mi tons of freight by shuttles of trucks. His main client Eurostar announced for the first time more than 10 millions annual passengers between the three capitals, that makes us more than 20 millions passengers per year in the tunnel. On average, only seven rail freight trains run through the tunnel each day – leaving a 43% unused capacity.  Only 1.3 Mi tons of goods are shipped by other rail companies, that make us a market share of 15% for rail transport, 85% for trucks…

Now Eurotunnel takes matters on hand for freight traffic when in 2009 was formed the company Europorte with some subsidiaries in UK and in France. 

Europorte in action in France (par rino54 via Flickr CC BY-NC-ND 2.0)
In 2012, Eurotunnel acquired three ferries from the declined company Sea France which were chartered to start the MyFerryLink ferry company. However, this operation on sea depends on a decision of the British competition authorities who intend to renew the ban on vessels from ex-SeaFrance to dock in the port of Kent in the course of this year.
The last news was the dispute between Eurotunnel and his client Eurostar. The railway company was accused in june 2013 of spreading “totally false” information about track access charges. Eurostar said track charges accounted for 25% of the cost of passenger tickets. Earlier in may, the European Commission called for a cut of up to 50% in track fares, which it said were excessive. It threatened France and the UK, which regulate Eurotunnel, with legal action if they did not act within two months to cut costs of the tunnel. Ultimately 28 april, 2014, Eurotunnel announced that it will reduce its track access charges by 25% (1).

As reported Benedict Brogan in The Thelegraph, « the Chunnel Tunnel quickly proved itself to be an economic success that aided trade and provided greater opportunities for British businesses to take goods and services to Europe ». And he concludes: « the Channel Tunnel will mark not just our connection to the Continent, but how hard it is to break ». Happy birthday Eurotunnel…

(1) See at these link







Libellés : , , , ,