London - Channel Tunnel rail link may tax the tax payer |
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Thu, 21 Jul 2005 14:05
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LONDON: Britain's National Audit Office has warned that the country's taxpayers may end up paying more than what was estimated for the 5 billion pound - London to the Channel Tunnel rail link.
The spending watchdog in a report said the passenger revenue forecasts for the project made in 1998 and 2001 are "too optimistic" and it feared taxpayers would have to make up the shortfall.
NAO chief Sir John Bourn said that "uncertainties remain" about the project, which will eventually provide a fast link for Eurostar trains between London and the Channel Tunnel at Folkestone in Kent. There are possibilities, however, that it may regenerate areas around London's King's Cross, Stratford in east London and Kent.
However, the agency said, "The economic justification for the project remains marginal."
The NAO felt the government should initiate steps to monitor costing forecasts regularly so that the department of transport can make "realistic predictions of the value and timing of future lending" to London and Continental Railways, which is taking up the project.
Sir Edward Leigh, chairman of the Commons public accounts committee, said the project symbolised a "sorry tale of something that started off in the expectation that all the risk would be borne by the private sector and has ended up today as one where they are all backed financially by the government".
Sir Edward said, "This is, however, a bold and prestigious project, which has contributed to our successfully securing another bold and prestigious project - the 2012 Olympics.
"While my committee will continue to safeguard taxpayers' money, we will not lose sight of the fact that now, more than ever, London needs the hope and confidence that grand projects can bring."
The first section of the link - from Folkestone to north Kent - was completed in September 2003 and the second, and final, section from north Kent to St Pancras in north London will be completed in 2007. The link will come handy to transport spectators from central London to the 2012 Olympic sites in east London.
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