Eurotunnel targets rail freight

Eurotunnel operates shuttle services and manages the tunnel

Eurotunnel, the operator of the Channel Tunnel, has said it plans to start its own rail freight business in early 2005.

The news came as the firm reported a reduction in revenue and passenger shuttle numbers in July-September 2003, compared to the same period last year.

The group saw total operating revenue fall 6% to £146.8m.

Passenger numbers for both cars and coaches declined, leading to an 11% fall in overall sales to £84.8m.

But there was an increase in truck shuttles, demonstrating the potential for freight.

Eurotunnel said it had successfully completed the technical feasibility study for a new rail freight container terminal at Folkestone in Kent.

Customer demand

Eurotunnel chief executive Richard Shirrefs said: "The development of rail freight services between Continental Europe and the UK is key to realising the full potential of the Channel Tunnel.

"We have made significant progress in the development of our own rail freight plans in response to customers' demands, taking advantage of the liberalisation of the European rail freight market."

It wants to run freight services from the UK to France, Italy and Germany, but faces opposition from French unions.

Eurotunnel will submit the final details required to complete its licence application during the next few weeks.

Debt refinancing

The company has been under pressure in recent weeks from a group of dissident shareholders, led by Nicholas Miguet, a French journalist.

He wants the Eurotunnel board replaced by a new one, in protest at what he says is unacceptable levels of interest being paid to banks on company loans.

The company warned in July that it was unlikely sales would cover interest on its 7bn euro (£4.9bn) debt this year, despite announcing that it had reduced its debt by £90m over the previous six months.

Announcing its quarterly results on Tuesday, Eurotunnel said it expects to undertake a significant debt refinancing during the next four years.

As well as car and coach shuttle services between England and France, Eurotunnel is responsible for management of the tunnel.