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Last Updated: Wednesday, 20 July, 2005, 23:06 GMT 00:06 UK
Warning on Channel rail link cost
Aerial view of Channel Tunnel rail link in Stratford, east London
The warning comes despite the first stages of the link being on budget
UK taxpayers may end up paying more than was forecast for the Channel Tunnel rail link, the government's spending watchdog has warned.

A National Audit Office (NAO) report found passenger revenue forecasts for the 5bn project - made in 1998 and 2001 - had been "too optimistic".

As a result taxpayers could be forced to make up the shortfall for the London to Kent link, the NAO added.

"The economic justification for the project remains marginal," it said.

The uncertainties remained despite "encouraging developments" linked to regenerating areas around London's King's Cross, Stratford in east London and Kent, the NAO said.

Close monitoring

It called on the government to take measures to minimise potential risks to taxpayers by reviewing costing forecasts more regularly.

Such a move would allow the Department of Transport to make "realistic predictions of the value and timing of future lending" to London and Continental Railways who are building the link.

Guide to the Channel Tunnel Rail Link, due to open in 2007

However, the NAO did acknowledge that Section 1 and 2 of the scheme had come in on time and to cost.

Section 2 - from north Kent to St Pancras in north London - is expected to be completed in 2007.

Edward Leigh, chairman of the House of Commons Public Accounts Committee called on the Department of Transport to keep a close eye on the scheme.

"This project is a sorry tale of something that started off in the expectation that all the risks would be borne by the private sector and has ended up today as one where they are all backed financially by the government," he said.

However, Mr Leigh did add that the plans to provide a fast link between London and the Channel Tunnel in Folkestone were "bold and prestigious" and had helped the UK secure the 2012 Olympics.

Part of the link will be used to carry spectators from central London to Olympic sites in east London.

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