City: Rail link still waiting for tunnel vision

SIR BOB REID, chairman of British Rail, once described the seemingly endless debate over where to put the high-speed Channel tunnel rail link and how to finance it as a pantomime. That was about two years ago, and things haven't moved on a great deal since. True, the route now seems finally to have been decided, though given the way it has been chopped and changed in the past, I wouldn't bet on it being stuck to.

The site of the main London terminal, however, has not. John MacGregor, the Transport Secretary, favours St Pancras for the obvious reason that it is the cheaper option. British Rail wants King's Cross because that would enhance the value of its proposed redevelopment of the station and adjoining land. The argument will no doubt rattle on long enough to add another couple of years to the link's completion date.

But this is a mere flea bite of a problem compared to the really big unresolved question: how is it going to be financed, who is going to do it, and on what terms? On this, Mr MacGregor, his department and British Rail still have virtually nothing to say. Given the scarcity of information on the subject, it is hard to believe they have even bothered to think about it seriously yet. Mr MacGregor continues to hang forlornly on to the long-held Government hope that this will be a mainly privately financed venture, though he now concedes there will have to be at least some element of state funding.

Even the cheapest possible option - overland to St Pancras - is costed at an indeterminate pounds 2bn to pounds 3bn. Assuming that by some miracle it is possible to construct the link for the lower of the two figures, the project still wouldn't be a wholly viable commercial proposition. Much more likely, it is going to end up costing a lot more, and the public sector input is going to have to be correspondingly higher.

The truth is that no one really knows, for with the Channel tunnel less than a year away from completion, the rail link into London is not yet even off the drawing board. The private sector companies the Government expects to participate are as much in the dark as everyone else. Mr MacGregor seems more committed to the project than many of his predecessors, and looks as if he has got the will to carry it through. But even if he moves immediately in establishing the sort of ground rules and parameters the City will need to invest, it's going to be a good two years before anything physical happens. That puts the completion date for this essential infrastructure project well into the next century. The pantomime continues.