Stratford Channel station planned: Tarmac consortium puts cost at pounds 37m

TARMAC and P&O are heading a consortium that wants to build a Channel tunnel rail link station at Stratford in East London.

The consortium, which also includes Newham Council and the London Docklands Development Corporation, presented its case at a launch at the House of Commons yesterday, arguing that a second London station was essential if the link's final terminus, the King's Cross/St Pancras complex, were not to become overburdened with passengers using the link both as an international railway and as a commuter line.

Union Railways, the BR subsidiary that is responsible for developing the 68-mile link between London and the entrance to the tunnel near Folkestone - likely to cost up to pounds 3bn excluding the stations - has been lukewarm about having a station at Stratford. It has suggested privately that Stratford is too close to King's Cross/St Pancras, and the development would be too expensive.

Yesterday, however, Gordon Waters, managing director of Tarmac's Project Division, said: 'We have now worked out the cost and it is pounds 37.2m rather than the pounds 100m that was originally suggested. The potential rate of return is very favourable at 14.2 per cent.'

The Stratford Promoter Group, which includes, among others, Regalian, Land Securities, John Mowlem, Laing and Fairview New Homes, says that Stratford would generate an extra three million trips, would be built on disused land, and would link in with several existing rail lines as well as the Jubilee Line Extension, which has just received the go-ahead, and Crossrail, whose future is in doubt. The main connection with the motorway network would be through the new M11 Hackney link which is under construction.

The bid is seen as an important step in the regeneration of East London and the East Thames Corridor. Newham Council leader Stephen Timms said: 'This provides our best chance in a hundred years to end the historic deprivation of East London.'

The Union Railways report that went to transport ministers on Friday does not favour a particular choice of stations. The other options are Ebbsfleet between Dartford and Gravesend - which is being sponsored by the two local authorities as well as Blue Circle and Rainham. This has the support of the London borough of Havering and Amec. None or all could be built, though it is most likely that one or two will be.

Stratford's bid is overshadowed by increasing doubts about whether the link will be built to its schedule of being completed by the year 2000.

Union Railways appears to be resigned to the fact that the Government will not provide sufficient money to bring the project to Parliament next year. Instead, it is set to remain on the back burner as no money has been allocated under the Government's spending plans beyond 31 March next year because the project was supposed to be picked up by the private sector.

However, private sector companies have been unwilling to become involved until the future of the link is more secure.

Union Railways managers estimate that pounds 250m would be needed to keep the project on schedule but it is now widely thought that John MacGregor, the Secretary of State for Transport, has come out badly of this year's spending round.

Ministers are unlikely to announce a formal delay. Instead they are likely to say there is a need for further consultation and for further work on trying to involve the private sector.