Three bidders fall out of tunnel link contest

THE DEPARTMENT of Transport is considering only six out of the nine consortia bidding for the contract to build and own the fast rail link between London and the Channel Tunnel.

Industry sources believe that three consortia have had their pre- qualifying bids ruled out less than two weeks after they were lodged because their applications were not up to scratch.

A shortlist of three or four is expected by the end of June, all of whom will receive a grant of up to pounds 1.5m from the Government towards the expected pounds 5m cost of compiling a formal tender.

A ministry spokesman refused to comment on the early elimination of the three applications and identity of the bidders.

Five groups have already revealed their hands. An Anglo-German group led by Hochtief and including Costain is thought to be favoured by the Treasury because of the German company's financial strength and reputation for innovative funding methods.

Strongest competition is expected from Eurorail, whose six members include BICC and Trafalgar House, and London & Continental Railways.

A John Mowlem-Taylor Woodrow group is also being considered for inclusion in the shortlist, as is a Tarmac-BZW combination. The final place in the last six is thought to be held by the engineer Babtie, Shaw & Morton, which has two Dutch partners.

Despite the opening on Friday by the Queen and President Mitterrand of the tunnel itself, the 68- mile fast rail link is not expected to be completed until 2002. Formal tenders are due by December with a winner to be announced by next April. The chosen company will be the one requiring the smallest Government subsidy towards the expected pounds 2.7bn cost.

John MacGregor, the Transport Secretary, has already pledged pounds 1.4bn towards the cost of the link.