RESERVED CAPACITY ON THE RAIL LINK: EXPENDITURE (Hansard, 25 April 1996)

§ Madam Deputy Speaker
With this, it will be convenient to discuss Government amendments Nos. 4 to 7.

§ Mr. Timms
May I briefly ask the Minister a question that arises from the amendment and that has been raised with me and my hon. Friend the Member for Newham, North-West (Mr. Banks), dealing with the terms on which payments will be made to London and Continental Railways?
Suggestions have been made in the press—I have with me a copy of the New Civil Engineer from 28 March—that London and Continental Railways will not have to start work on building the channel tunnel rail link until European Passenger Services is profitable, which will clearly give London and Continental Railways, as the owner of EPS, the ability to borrow against the Eurostar revenue stream. Is that part of the agreement between the Government and London and Continental Railways?
Profitability for Eurostar will entail about 6 million or 7 million passenger journeys per year, compared with about 3 million journeys at present. It is projected that that will take 18 months or so. If it does take that period, that may just about be consistent with the current timetable of construction commencing in autumn 1997, but it is tight.
Is there uncertainty about the timetable for the scheme related to the speed of achieving profitability at Eurostar? Will that be a factor in whether the 2002 target date for the first trains from Stratford to Paris is achieved? As far as I know, the Government have said nothing on the point, but there has been speculation about it and I would be grateful if the Minister could clarify the position.

§ Mr. Watts
In the development agreement, there is no relationship between the start of construction and the profitability of European Passenger Services, although it will be desirable for EPS to be transferred to London and 653 Continental Railways as soon as possible so that it can start to improve the service's profitability. There is nothing in the agreement that ties the profitability of the Eurostar services to the start of construction.