Channel Tunnel Rail Link: financing and risk transfer

Abstract

The £5·2 billion Channel Tunnel Rail Link is one of the world's largest public–private infrastructure projects ever undertaken. This paper describes the innovative funding and risk-sharing arrangements that were developed to lower the cost of capital—and maintain risk transfer to the private sector—despite the initial failure of Eurostar to meet revenue forecasts and the later failure of Railtrack. It could serve as a model for the future public–private procurement of major transport infrastructure projects worldwide.