Monday, September 28, 1998 Published at 16:37 GMT 17:37 UK
Business: The Company File
Chunnel deal on track
Railtrack plans to invest £4bn in the Channel Tunnel rail link
Railtrack, which owns Britain's railway tracks and major stations, has received backing from its shareholders for plans to invest £4bn in the Channel tunnel rail link to London.
Shareholders had to give their approval at an extraordinary general meeting because of the size of the deal.
The total number of votes in favour was 201m, with only 19m against.
There are around 504m Railtrack shares issued, but the shareholders who attended the special meeting own nowhere near enough of the company to overturn the outcome of the proxy vote.
Railtrack steps in
Britain has lagged behind France in building its part of the high-speed rail connection between London and Paris.
While France finished its link in time for the opening of the Channel Tunnel, in the UK the private sector consortium found the going more difficult.
In January London & Continental Railways asked the UK Government for an extra £1.2bn subsidy towards operating the Eurostar service and the construction of the Channel Tunnel Railink.
Deputy Prime Minister John Prescott turned down the request.
He asked London & Continental for proposals which would ensure the link was built by the private sector on terms acceptable to the government.
Railtrack stepped in. The company will spend £1.5bn on the first phase up to north Kent and £2.5bn on the second phase into St Pancras station in London.
It will manage the construction for the railway up to north Kent and commit to buy it on completion. It will also have the option to build and buy the rest of the link in 2006.
Railtrack has agreed to carry the full cost of any overruns in construction costs.
The link will carry trains at 300 km an hour (186mph) through southeast England, reducing the journey time between London and the Continent by up to 35 minutes.
Railtrack shares closed 54p higher at £16.60.
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