§ Mr. OttawayTo ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 15 June 1998,Official Report, column 46, what contractual penalties will apply in the event of LCR failing to build the entire railway from the Channel Tunnel to St. Pancras. [49345]
§ Ms Glenda JacksonThe existing Development Agreement between the Government and London and Continental Railways (LCR), which will be updated to reflect the deal outlined by my right hon. Friend the Deputy Prime Minister on 3 June 1998,Official Report, columns 367–70, is legally binding on LCR. It requires LCR to build all of the Channel Tunnel Rail Link (CTRL) as detailed in the CTRL Act 1996. Should LCR fail to 648W fulfil its obligation to provide the link in accordance with the Act, it would be in breach of that contract. This would allow the Secretary of State to terminate the Development Agreement.
Moreover, under the revised arrangements, the bulk of the £1.8 billion (NPV) Public Sector Support will be reserved for Phase 2 and would start to be paid only when the majority of the construction costs of that phase had already been incurred.
§ Mr. SnapeTo ask the Secretary of State for the Environment, Transport and the Regions if he will review the time scale of phase two of the Channel Tunnel Rail Link between Ebbsfleet and King's Cross to assess ways in which it might be advanced. [49468]
§ Ms Glenda JacksonA review would serve no useful purpose. As my right hon. Friend the Deputy Prime Minister made clear on 3 June 1998,Official Report, columns 367–70, the revised arrangements are specifically designed to incentivise Railtrack to commit to acquire Section 2 as early as possible. Railtrack will have a lesser financial return on Section 1 than for Sections 1 and 2 combined. The sooner Railtrack commits to the second phase, the sooner it can expect to earn the higher return.