The Channel Tunnel: Investment Appralsals
| Author | A. H. WATSON |
| Published date | 01 March 1967 |
| Date | 01 March 1967 |
| DOI | http://doi.org/10.1111/j.1467-9299.1967.tb02025.x |
The Channel Tunnel
:
Investment
Appraisals
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This
lecture,
by
th Director
of
Statistics at the
Ministy
of
Transport,
WAF
delivered
an
London
on
7
November
I
966
in
the Institute’s Lecture Series
on
‘
The Evaluation
of
Capital Investment Projects’.1
On
8
July
this year, the British and French Prime Ministers agreed that a
Channel Tunnel should be built, subject to finding a mutually acceptable
solution for the construction work.
As
recently as
28
October, Mrs.Castle,
the British Minister
of
Transport, and XPisani, the French Minister of
Equipment, announced that the British and French Governments had
agreed the basis of a solution
for
the construction and operation of the
Tunnel, making use of finance drawn from private sources for constructing
it, but entrusting the operation to an Anglo-French public authority.
So
after about
150
years during which we have had plan and counter-
plan, speculation and day-dreaming, and, over the last decade, the results
of
some very solid technical, economic, judicial and administrative work,
the Tunnel has become a practical project with every chance of early
realization. We can now look forward to seeing it
in
operation by
1975.
Today the old military objections have happily disappeared and the
case for and against the Tunnel has become primarily an economic one.
With a growing demand for cross-Channel transport and a range of
alternative ways of meeting that demand
-
a tunnel, a bridge, or the
continued development
of
sea and air transport
-
four fundamental but
closely related questions must be resolved before a decision can be made
on
any particular course of new investment. The first question
is:
what are
the costs and benefits attributable to the alternatives and how are they
disposed in time? The second question is: which alternative gives the
most
favourable return to the community? The third problem
is
to establish
whether the necessary resources can or should be spared for the particular
field
of
investment involved (Related to this question, in the case of private
finance especially,
is
the question ‘can the money be raised?’). Fourth,
comes the question: ‘Should the investment be undertaken now or later?’
’Ackmrulcdgcnrent.
I
am
much
indebted to
colleagues
who
have
helped in the preparation
of
this
lecture,
and
in
particular
to
Mr.
J.W.Baker,
Mr.
J.A.L.Barber,
Mr.P.D.Huggins
and Mr.A.G.Starr.
I
PUBLIC ADMINISTRATION
The answers to such questions are always complex, even in the relatively
parochial field of the investment programme of a single well-established
undertaking working on familiar ground. In the case
of
the Channel link
there are many complicating factors
to
be taken into account,
so
that,
although the main objectives remain simple enough, the journey towards
them is full of detailed problems and complexities.
One of the more obvious sources of complexity is the size and unique
nature of the project
-
and indeed of some of the alternatives -purely as
engineering problems. Another lies in the multiplicity of the authorities
and interests involved in cross-Channel transport, bearing in mind that
the Dover Straits are not only the route between Britain and France but
also part of one of the busiest international waterways for through shipping
traffic. Existing cross-Channel transport facilities by sea and air are
diversely owned and operated over a wide international field. Any fixed
road or rail link, whether by tunnel or bridge, would need to satisfy both
British and French interests, without unduly interfering with the interests
of
other countries using the Channel
as
an international waterway. More-
over, even a privately financed fixed link between the two separate public
road and railway networks of Britain and France must inevitably require
the consent and co-operation of the two Governments, coupled with a
considerable degree of governmental assistance and control
of
one kind or
another.
It follows that
a
fixed Channel link should have
a
formal basis in some
sort of international convention between Britain and France: and it was
no doubt with this in mind that two separate private promoting groups for
a
Channel Tunnel project and a Channel Bridge project submitted their
proposals in
1960
and
1961
to the British and French Governments for
study.
THE
PROBLEM
BEFORE THE GOVERNMENTS
The recent Anglo-French governmental consideration of the Tunnel as an
investment project began in November
1961
when the British and French
Ministers of Transport set
up
a working group of officials from the two
countries. The object
of
this Anglo-French working group was to establish
whether the tunnel and bridge projects were technically adequate and
practicable; whether they gave rise to serious problems
in
the fields of
international law or defence;
to
what extent, if any, they were superior on
economic or other grounds
to
the established means
of
crossing by sea or
air; and how far they showed promise
of
financial viability
as
private
ventures, on the basis proposed by the two private promoting groups. The
working group presented
a
report on its work in July
1963
and
it
was
subsequently published by
H.M.S.O.
under the title
Proposals
for
a
Fixed
Channel
Link.
2
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