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View from City Road: Late again on the railways

Thursday 30 June 1994 23:02 BST
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There are lies, damned lies and Eurotunnelspeak. A couple of days before the closure of the pounds 858m rights issue last month, Eurotunnel said it was on the point of applying for an operating licence for passenger services. All the important tests had been completed, allowing British Rail and SNCF to begin their Eurostar service this summer, hopefully in July.

It so happened that this cheerful gloss on the prospectus emerged over a weekend when the underwriters were biting their nails about whether they would be left with the bill for the rights issue the following Wednesday. As is so often the case with Eurotunnel, however, it has proved so much hot air. Earlier this week the railways said Eurostar could not possibly begin before the last week in September.

So who was misleading whom? Eurotunnel says it was telling the truth about the licence. It still expects to apply within days. The hold-up was because of problems on the railways' own tracks, particularly in the UK. The company is now thinking of claiming compensation from the railways.

Eurotunnel insists it was only told of the problem on Wednesday, seven days after the rights issue went through. In the wake of the news, the shares slid 12p yesterday to 260p, a price at which the underwriters would have had to take the lot a week earlier. How lucky that the railways did not warn Eurotunnel of impending problems.

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