Department of Transport

Mawhinney shortlists Eurorail and London & Continental in rail link competition
_______________________________________________________________

date 3 July 1995
source Department of Transport
type Press release

note 198

Secretary of State for Transport, Dr Brian Mawhinney, today announced
that Eurorail CTRL Ltd and London and Continental Railways will go
forward to the final stage of the Channel Tunnel Rail Link (CTRL)
competition.

Making the announcement in answer to a Parliamentary question from
Andrew Rowe MP (Mid Kent), Dr Mawhinney said:-

"The Government welcomes and applauds the immense effort which all
four bidders have put into their tenders. This is another indication
of the very real commitment of the private sector to the railway
industry of the future.

"It is already clear that bringing in the private sector is going to
add value to both the CTRL project and the European Passenger
Services (EPS) business. This is another good example of the benefits
flowing from the Government's Private Finance Initiative."

Looking to the future, Dr Mawhinney said:-

"There are two very strong candidates left in the race. I am
confident that at the end of the coming negotiation phase we shall be
in a position to strike a deal which is good for the project and its
backers, good for passengers and good for the taxpayer.

"We are on schedule and I hope to announce the winner of the
competition before the end of this year."

Dr Mawhinney went on to explain the basis of today's decision:-

"The ranking of bids in the first stage has been based mainly on an
evaluation of the level and timing of the Government contribution and
the approach taken by the bidders to risk, together with a
qualitative assessment of their financial proposals. The evaluation
also took account of other transport benefits."

Commenting on recent speculation about the line of the route, Dr
Mawhinney said:-

"We have no intention of changing the route for the new line. We
imposed a minimum requirement on the bidders that the line should be
built on the lands defined in the CTRL Hybrid Bill, which is
currently before a select committee of the House of Commons. There
is no question of changing that."

The winner of the competition will design, build, finance and
maintain CTRL and take ownership of EPS and Union Railways Ltd (UR),
both of which were formerly part of British Rail and are now
Government-owned companies.

EPS operate the "Eurostar" services jointly with SNCF and SNCB
through the Channel Tunnel between London and Paris/Brussels. UR has
been responsible for planning and developing the CTRL project. The
promoter will be bound by certain obligations such as those imposed
by the environmental and heritage minimum requirements.

NOTES TO EDITORS

1. The Government's decision to launch a competition to select a
private sector promoter for the CTRL project was announced in
November 1993. The Department published the names of the four
prequalified consortia in June 1994. Bids from the four consortia -
Eurorail, London and Continental Railways, Green Arrow (as they are
now known) and Union Link - were received on 14 March 1995.

2. The four bids have been evaluated in accordance with the criteria
which were set out in section 11.5.1 of the Competition Overview
document published by the Department last August as follows: "The
ranking of bids at the first stage, prior to the final negotiations,
will be based on the evaluation of the cost and timing of the
Government contribution together with the approach taken by Tenderers
to risk and a qualitative assessment in respect of financial
approach. In addition, the Government will consider the impact of
other transport benefits, and the timing of the accruing of such
benefits, in the ranking of bids."

The evaluation procedure aims to satisfy the two central tenets of
the Private Finance Initiative: value for money and the appropriate
transfer of risk to the private sector.

3. The members of the shortlisted consortia are:

Eurorail

BICC plc
HSBC Holdings plc
Trafalgar House plc
National Westminster Bank plc
SeeboardLondon & Continental

Ove Arup & Partners
Bechtel Ltd
Sir William Halcrow & Partners
National Express Group plc
The Virgin Group Ltd
S G Warburg & Co Ltd.

4. In recognition of the size of the project and work needed to
prepare bids, the Government has offered the bidders who have not
been shortlisted a contribution to their costs. The offer is 33% of
costs or #1.5m, whichever is lower. This was announced in March 1994.

CTRL Project - Background

5. The Channel Tunnel Rail Link will be a 108km high-speed railway
between London and Channel Tunnel for both international and domestic
passenger services. The cost was estimated by UR in 1993 at #2.7
billion. The Government will provide a substantial financial
contribution in recognition of the domestic transport and
regeneration benefits and also the very large benefits to
international passengers. The final figure will be determined by the
outcome of the competition.

6. Most of the route of the CTRL was announced on 24 January 1994 and
safeguarded the following month. A further announcement in respect of
two particular parts of the route - in Kent at Ashford and Pepper
Hill - was made in April 1994, which finalised the route.

The Hybrid Bill

7. A Hybrid Bill authorising the construction, operation and
maintenance of the CTRL was introduced in Parliament in November
1994, and is currently being considered by a Select Committee of the
House of Commons. Royal Assent is expected in summer 1996.

# = pounds sterling

Railhub Archive ::: 1995-07-03 DoT-001