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Tuesday, June 2, 1998 Published at 14:42 GMT 15:42 UK

Business: The Company File

Railtrack to the rescue

The Channel tunnel link is finally on track

Railtrack has confirmed that it has approached the government with plans to invest in the troubled 5.4bn ($8.8bn) Channel tunnel rail link.

New contracts to build the 68-mile link are expected to announced soon.

Railtrack, which owns Britain's railway tracks and major stations, says that "an announcement on the acceptability of these proposals is expected shortly".

Imperial College Management School's Stephan Shemanski questions the need for the rail link
The rail link is likely to be built in stages with Railtrack expected to buy the first phase from London to Ebbsfleet from London & Continental Railways (LCR), the original project consortium which fell into financial trouble in January.

John Prescott, the Deputy Prime Minister, is reported to be ready to unveil the rescue package in a Commons statement on Wednesday.

A spokeswoman for the Department of the Environment, Transport and the Regions said: "We can't say anthing at this stage. But the talks on the rail link are heading towards a final stage."

[ image: John Prescott is expected to announce the rescue package on Wednesday]
John Prescott is expected to announce the rescue package on Wednesday
The government is understood to have agreed to contribute an extra 700m over the project's 10-year life.

That comes on top of the 1.8bn it has already committed but is less than the 1.2bn LCR had originally called for in January when the full extent of its problems came to light.

The Eurostar train service will be operated by a consortium led by British Airways and National Express or Richard Branson's Virgin Group.

The link, which would carry trains at 300 km an hour (186mph) through southeast England is due to be completed in 2003 and promises to reduce the journey time between London and the Continent by up to 35 minutes.

The French side of the link, from Calais to Paris, was publicly funded and opened on schedule along with the Tunnel in 1995.

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