THE OFFICIAL HISTORY OF BRITAIN AND THE CHANNEL TUNNEL This authoritative volume presents the first official history of the British Government’s evolving relationship with the Channel Tunnel project from the early nineteenth century to 2005. The building of the Channel Tunnel has been one of Europe’s major projects and a testimony to British-French and public-private sector collaboration. However, Eurotunnel’s current financial crisis provides a sobering backcloth for an examination of the British Government’s long-term flirtation with the project, and in particular, the earlier Tunnel project in the 1960s and early 1970s, which was abandoned in 1975. Commissioned by the Cabinet Office and using hitherto untapped British Government records, this book presents an in-depth analysis of the successful project of 1986–94. It provides a vivid portrayal of the complexities of quadripartite decision-making (in two countries, with both public and private sectors), revealing new insights into the role of the British and French Governments in the process. Written by Terry Gourvish, Britain’s leading transport historian, this book will be essential reading for general readers and specialists with an interest in business history, international relations, public policy and project management. WHITEHALL HISTORIES: GOVERNMENT OFFICIAL HISTORY SERIES ISSN: 1474–8398 The Government Official History series began in 1919 with wartime histories, and the peacetime series was inaugurated in 1966 by Harold Wilson. The aim of the series is to produce major histories in their own right, compiled by historians eminent in the field, who are afforded free access to all relevant material in the official archives. The Histories also provide a trusted secondary source for other historians and researchers while the official records are not in the public domain. The main criteria for selection of topics are that the Histories should record important episodes or themes of British history while the official records can still be supplemented by the recollections of key players; and that they should be of general interest, and, preferably, involve the records of more than one government department. THE UNITED KINGDOM AND THE EUROPEAN COMMUNITY Vol. I: The Rise and Fall of a National Strategy, 1945–1963 Alan S. Milward SECRET FLOTILLAS Vol. I: Clandestine Sea Operations to Brittany, 1940–1944 Vol. II: Clandestine Sea Operations in the Mediterranean, North Africa and the Adriatic, 1940–1944 Brooks Richards SOE IN FRANCE M.R.D. Foot THE OFFICIAL HISTORY OF THE FALKLANDS CAMPAIGN Vol. I: The Origins of the Falklands War Vol. II: War and Diplomacy Lawrence Freedman THE OFFICIAL HISTORY OF BRITAIN AND THE CHANNEL TUNNEL Terry Gourvish THE OFFICIAL HISTORY OF BRITAIN AND THE CHANNEL TUNNEL Terry Gourvish Research: Mike Anson First published 2006 by Routledge 2 Park Square, Milton Park, Abington, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2006 Crown Copyright This edition published in the Taylor & Francis e-Library, 2006. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN10: 0–415–39183–0 (hbk) ISBN13: 978–0–415–39183–2 (hbk) ISBN10: 0–203–96949–9 (ebk) ISBN13: 978–0–203–96949–6 (ebk) The author has been given full access to official documents. The data and factual information in the report is based on these documents. The interpretation of the documents and the views expressed are those of the author. There was a young lady of Rye Who said, with a smile in her eye ‘If a tunnel they bore From France to our Shore Goodbye, little basin goodbye’* *Quoted in Claude Boillot–TSI, 23 December 1959, TSI Archive, Vol. 60, HBS. CONTENTS List of figures ix List of cartoons x List of tables xi Preface xiii Acknowledgements xvi Abbreviations and acronyms xvii 1 Beginnings, 1802–1945 1 2 New aspirations: the Channel Tunnel project, 1945–64 16 3 Another false start: the Wilson Governments and the Tunnel, 1964–70 46 4 The Heath Government and the Tunnel: reaching agreement, 1970–2 79 5 The Heath Government and the Tunnel: taking the project forward, 1972–4 107 6 Abandonment, 1974–5 134 7 Keeping hopes alive, 1975–81 171 8 The Thatcher Governments and the Tunnel: from hope to eternity, 1981–4 207 9 The Thatcher Governments and the Tunnel: choosing a promoter, 1984–6 247 vii CONTENTS 10 Eurotunnel: finance and construction, 1986–90 285 11 From Tunnel to transport facility, 1988–94 322 12 The Channel Tunnel: postscript, 1994–2005 364 Notes 386 Index 511 viii FIGURES 1.1 Sartiaux-Fox Channel Tunnel scheme with strategic viaduct, 1906 8 1.2 Channel Tunnel Co. scheme, 1929–30 12 2.1 CTSG scheme, 1960: proposed alignment 27 3.1 Options for Channel Tunnel terminals, 1968 75 5.1 The 1970s Tunnel 110 6.1 Route of proposed Channel Tunnel Rail Link, 1973 150 7.1 The Channel Tunnel circle 205 9.1 Thatcher and Mitterand’s signed announcement to proceed with a Channel Tunnel, 20 January 1986 278 10.1 Channel Tunnel organisational chart 288 11.1a Channel Tunnel Rail Link: British Rail’s four route options, 1988 332 11.1b British Rail’s four route options, 1988: London termini 333 11.2 Channel Tunnel Rail Link: options, 1989–94 338 12.1 The ‘Eurotunnel System’, 1994 367 ix CARTOONS 1 Channel Tunnel phobia, 1907 9 2 Anglo-French differences, 1963 39 3 Cynicial about project management, 1966 61 4 Abandonment, 1975 166 5 The illusive Tunnel dream, 1981 208 6 Thatcher and Ridley encounter opposition, 1985 259 7 Alastair Morton accuses TML, 1989 320 8 Escalating costs and financial crisis, 1991 353 9 The Tunnel opens, 1994 365 10 The banks’ continuing anxieties, 1996 374 11 Eurotunnel wins a Concession extension, 1997 375 12 The Channel Tunnel Rail Link’s financing problems, 1998 379 x TABLES 1.1 Select list of early proposals for a fixed channel link, 1803–89 2 2.1 Channel Tunnel Study Group Report, March 1960: estimated construction costs, and prospects for a rail-only tunnel 28 2.2 Channel Tunnel Study Group, estimate of the Channel Tunnel’s ‘economic benefits’, July 1960 32 2.3 Tunnel v. Bridge: Joint working party’s 1963 traffic forecasts for 1980 36 2.4 Tunnel v. Bridge: Joint working party’s 1963 assessment of economic and financial returns 37 3.1 The 1963 and 1966 estimates of economic and financial returns 55 3.2 Traffic forecasts: revisions of April and August 1966, compared with Anglo-French report, 1963 57 3.3 Shortlisted consortia for Channel Tunnel, May 1967 65 3.4 Channel Tunnel terminal facilities: options, 1959–69 76 4.1 The Channel Tunnel consortium, July 1970 82 4.2 ‘Interim’ study results, 1972, compared with 1963, 1966 and 1969 96 4.3 Participation in the private consortium, October 1972 105 5.1 The 1973 studies: estimated financial return 113 5.2 Channel Tunnel, 1973: cost-benefit analysis for the United Kingdom 113 5.3 Traffic forecasts, 1973, compared with those in 1963 and 1966 114 5.4 Suggested remuneration proposals (based on lower growth estimate), July 1973 120 5.5 Agreed remuneration package, September 1973 126 6.1 Channel Tunnel Rail Link: analysis of increases in cost between June 1973 and August 1974 159 7.1 Cross-channel passenger and freight traffic: actual, 1962–73, and Cairncross Report forecast, 1980–90 180 xi TABLES 7.2 Cairncross Report estimate of Tunnel costs and benefits (UK share), 1975–2030 182 7.3 Cairncross Report estimate of rail investment costs and benefits (UK share), 1975–2030 183 7.4 BRB and SNCF single-track rail tunnel: estimate of capital investment, 1978 191 8.1 Channel Fixed Link options, December 1981 215 8.2 Cross-channel traffic forecasts, 1980–2000 229 8.3 Channel Fixed Link: estimated rates of return and resource costs, April 1982 230 9.1 Evaluation of Channel Link options by Banking Report, 1984 248 9.2 Competing bids for the Channel Fixed Link concession, October 1985 262 9.3 Comparison of promoters’ capital cost and revenue estimates, December 1985 269 10.1 Toll payments agreed under the Railway Usage Contract, July 1987 304 10.2 Progress with tunnelling, 1987–91 311 10.3 Increases in Channel Tunnel construction and project costs, 1985–90 320 11.1 British Rail’s four options for new route capacity, July 1988 331 11.2 Eurotunnel’s estimate of cost consequences of IGC and Governments’ interventions, November 1993 361 12.1 Channel Tunnel outturn, 6 May 1994, compared with November 1987 forecast 368 12.2 Channel Tunnel traffic, 1994–2004 370 12.3 Eurotunnel operating results and profit and loss, 1994–2004 372 xii PREFACE In 2001 I was appointed by Prime Minister Tony Blair to write a history of the Channel Tunnel as part of the programme of official histories run by the Cabinet Office. My broad remit was to analyse in some depth the involvement of the British Government, its ministers, civil servants and advisers, in the project management of this, one of the largest, if not the largest, infrastructure mega-projects in Europe.