BUSINESS/ECONOMY

Tough times for a 200-year-old dream

BRIGID JANSSEN September 12 1988
BUSINESS/ECONOMY

Tough times for a 200-year-old dream

BRIGID JANSSEN September 12 1988

Tough times for a 200-year-old dream

It is just a hole in the ground, but it is a huge tourist attraction. A few months ago, when visitors arrived at the drab village of Sangatte, just outside the French port of Calais, they would often peer into an enormous excavation to find the entrance to a 31-milelong tunnel now being drilled under the English Channel. Now, visitors at the site find a large industrial building covering the hole and they have to imagine the underground works by watching videos and examining cutaway models. They can also buy an endless array of souvenirs — including lighters, badges, shirts and ballpoint pens. And for now, tourism appears to be the only light at the end of the tunnel project.

The 200-year-old idea to build a tunnel—now dubbed “Chunnel”—joining Britain to Europe was approved in January,

1986, and construction began in December of that year on the $10.3-billion project. But it is already falling seriously behind schedule. In an effort to speed the process, Eurotunnel, the BritishFrench consortium that is building the Chunnel project, sent a letter to the 10 participating subcontractors. The letter warned that further delays would result in stiff financial penalties — which could ultimately run as high as $80,000 a day. Eurotunnel president Alastair Mortan said that the warning was intended to be a “kick up the posterior” of the 10 companies.

As reports of the construction delays spread, Eurotunnel shares slipped by 10 per cent. And in just another two months, Eurotunnel will have used up all of the $2.25 billion it raised in an extremely popular share issue last November. As a result, it will likely have to dip into the $10.3 billion in loans that it has arranged with a consortium of international banks. But the loans are apparently conditional on Eurotunnel’s ability to stick to a tight construction schedule that keeps it within at least 14 months of its expected May, 1993, completion date. Some Londonbased analysts have said that the banking consortium could force Eurotunnel to issue more shares before it agrees to lend the Chunnel developers

any money. Two Canadian banks, the Bank of Nova Scotia and the Canadian Imperial Bank of Commerce, have each agreed to loan Eurotunnel $120 million.

The cause of the delays differs on both sides of the Channel. In Britain, where 1,500 men are working day and night at the Shakespeare Cliff tunnel entrance near Folkestone, crews are hampered by faulty drilling equipment. A Eurotunnel spokesman in London confirmed that only 1 VA miles of the 31-mile-long central service tun-

nel, which will run between the two main railway lines, have been drilled under the Channel, instead of the 2V& miles scheduled for the end of August. As a result, workers are at least 13 weeks behind a pace that would have seen the Chunnel open on May 14, 1993.

In addition to the troublesome drilling machines on the British side, there have also been undisclosed management problems, which Eurotunnel spokesmen say have been resolved by recent changes in top executives at Transmanche (across the channel) Link TML, the Anglo-French firm representing the construction consortium. Finding skilled workers has also been difficult. Last winter, the construction firms could not find enough trained, experienced workers to staff their crews. But a British Eurotunnel spokesman said that all those prob-

lems have apparently been resolved, and that “there is no reason why the construction firms should not be able to catch up.” He added: “We have issued a formal notice to TML requesting information on how they plan to recover on the delays. Now we simply have to wait.”

Waiting is also the strategy now being deployed on the French side of the tunnel, where construction crews have faced geological and technical problems. Construction is 12 weeks behind, and only one-eighth of a mile of dig-

ging was completed at the end of August. Although the rock under the cliffs along the British coast is solid, the formations under the French side have turned out to be more water-sodden and fissure-ridden than expected, and that has created complex drilling problems. The boring equipment has to be able to drill hard rock at high speed and then revert to attacking waterpermeated rock at a much slower pace.

In addition to the geological surprises, the machinery has been unreliable. The French called their first boring machine Brigitte and it arrived late and has been impetuous ever since. In operation since March, it has only managed to complete the oneeighth-of-a-mile cut, leaving the French far behind their two-mile schedule. Following Brigitte’s path, a second French drilling rig named Virginia has widened the service tunnel

through the same ground in just two months. The French are bringing in two more machines, which should be drilling by the end of the year.

But French officials, too, say they are optimistic that construction will catch up and that the tunnel will open on schedule. Said French spokesman Christian Antoni: “The delays we have seen so far are completely recoverable. We have lost time with equipment and geological problems in digging the service tunnel. We had to sound the alarm bells with the construction companies to say, ‘Watch out—these delays are unacceptable.’ ”

The French face other problems as well. The French government wants to open a new northern leg of the highspeed TGV—train à grande vitesse (high-speed train)—running from Paris to London. But residents and politicians in the area around Amienshalfway between Paris and Calais— are so angry at the planned routing of the TGV around them to the north that they have started a unique protest movement. Their association, called Amiens-TGV, was formed to bring the track in a straight line from Paris to Calais rather than along a more circuitous route north to Lille, and then along the coast to Calais—a route that would take 23 minutes off a 2l/zto three-hour trip from Paris to London.

They want the train to run through Amiens, said Joseph Gouranton, an organizer of the association, because “economic development follows; without the train, there is nothing.” He added that even the existing train to Amiens would be eliminated or drastically reduced if the track is not laid through Amiens. In protest, the association is buying up all the land it can along the planned northern route and then selling it off in tiny lots of about a square yard each for $2 to private citizens. By doing so, members of the group say that they hope to stall the railway by forcing it to negotiate expropriation with thousands of landowners.

Executives of the association say that they expect to sell to 10,000 individuals. “A square yard to stand up, or for a space to lie down, we will sell two square yards,” said Gouranton. He added that the planned route for the longer line—to be supplemented later by a second, more direct route to Calais—will cost $600 million more to build than the association’s proposed route. But long before passengers travel between London and Paris by train through the Chunnel, workers, including Virginia and Brigitte, will have to overcome immense technical problems to get back on schedule.

-BRIGID JANSSEN in Paris