§ Mr. TimmsTo ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 26 February 1998,Official Report, column 332, what further response he has had from London and Continental Railways in respect of revised financing proposals for the Channel Tunnel Rail Link. [37147]
§ Mr. PrescottI have received a progress report and further developed proposals from London and Continental Railways in conjunction with other companies, notably Railtrack, invited by the consortium to participate in trying to take forward the Channel Tunnel Rail Link under the existing Development Agreement. The parties' latest report on progress makes material inroads into the £1.2 billion additional subsidy which was sought by LCR in January, and which I rejected as unacceptable. LCR have proposed a transport operator to take296W responsibility for Eurostar services, and that the construction of the Rail Link be in two phases. These proposals do not yet meet the Government's requirements, a view which is accepted by LCR and by Railtrack. Both companies agree that further significant improvements can be achieved in each of three key areas: reducing the additional cost to the taxpayer; increasing the extent to which risk is retained in the private sector; and establishing an incentive sufficient to ensure the construction of the whole of the Rail Link.
I am satisfied that sufficient progress has been made, and is in prospect, for the cure period available under the CTRL Development Agreement to be extended to 29 May 1998, in order to conclude a satisfactory agreement if one is achievable.