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Tuesday, 2 April, 2002, 10:24 GMT 11:24 UK
Railtrack gets Channel Tunnel offer
Proposed new terminal at St Pancras railway station, which will serve the Channel Tunnel link
Network Rail wants to take over St Pancras station
Railtrack has received offers worth a total of 375m for its rights to the Channel Tunnel rail link.

London & Continental Railways, holding company for the link, has bid 295m for Railtrack's rights to buy part of the line when construction work is completed.

Geoffrey Howe
Geoffrey Howe: Welcomed offer
Network Rail, a government-backed firm, is offering 80m for the rights to manage and maintain the link, and collect charges from Channel Tunnel rail operators such as Eurostar.

Network Rail would also manage London's St Pancras Station, which is set to be revamped in preparation for its role as the Channel Tunnel passenger terminal, once the link is finished.

Key meeting

The proposals, which were welcomed by Railtrack chairman Geoffrey Howe, will be put for approval to a shareholders' meeting in June.

Rising value of Railtrack shares
Network Rail offer: 100p per share
Bids for Channel Tunnel link rights: 70p per share
Property and cash: 80p per share

Total: 250p per share

The meeting will also discuss Network Rail's bid last week to take on Railtrack's existing rail infrastructure for 500m.

The offers together keep Railtrack investors on track to receive 250p per share, a spokeswoman told BBC News Online.

"Including property interests and cash, it comes to that once various fees are taken out," the spokeswoman said.

Shareholders threatened to take the government to court after it forced Railtrack plc - the Railtrack arm which runs the existing UK rail network - into administration and repeatedly rebuffed investors' pleas for compensation.

Last week's Network Rail bid was backed by 300m of government cash and a 200m government-backed loan.

Difficult history

The offer is the latest twist in a rail link saga dating back well before the opening of the Channel Tunnel in 1994.

While France was quick to build high speed rail links from the tunnel to Paris, construction of the link to London became bogged down in funding squabbles and disputes over the line's route, which passes through one of Europe's most densely populated regions.

London & Continental, a consortium including construction giant Bechtel, engineering firm Ove Arup and investment bank UBS Warburg, was in 1996 handed the contract to oversee the link's construction.

The first, tunnel-to-north Kent phase of the link - the section over which Railtrack has purchase rights - is set for completion in September next year.

The second phase, including the construction of a nine-mile tunnel from Barking to a revamped St Pancras station, is set to open in 2007.

London & Continental already has rights over this section.

When complete, the link will cut London-Paris journey times to two hours and 15 minutes on non-stop trains.

Brussels will be reached in two hours, and Ashford, in Kent, in 35 minutes compared with the current 75-minute journey time.

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