The Official History of Britain and the Channel Tunnel (review)

Although constantly verging on financial collapse, the Channel Tunnel, which opened in 1994, has been seen by some as a remarkable testimony to human endeavor and engineering skills. Finance was largely from the private sector, construction was undertaken by the Trans-Manche Link Company under contract to Eurotunnel which operates the tunnel on a 99-year concession, levying tolls on the rail company, Eurostar, and road vehicles.

The idea of a tunnel dates back to the 1830s but the main study work started in the 1950s. There was a seemingly endless catalog of study reports, interdepartmental and intergovernmental committee meetings, and high-level Anglo-French political dialogues, each of which ended in hesitancy and a call for further investigations. As the Treasury remarked in 1973, the project appeared to be of only marginal benefit but "the evidence was not sufficiently compelling to justify abandonment" (p. 95). Terry Gourvish sets out the story in a strict narrative form from chapter one onwards. It is a very dense narrative of over 500 pages, reflecting the sheer slog involved in the study reports and negotiations as well as in Gourvish's own efforts. He does, however, write very lucidly; there are excellent diagrams and tables updating the forecasts so the narrative flows along smoothly with additional spice from cartoons and descriptions of the comings and goings of strong personalities like Pompidou, Thatcher, and Mitterand. Altogether I found this a valuable, scholarly piece of work which will be a key reference not just about the Tunnel, but for any research on mega-infrastructure projects.

The chosen scheme became the largest submarine road/rail link and the second largest rail tunnel in the world and one of Europe's largest infrastructure projects. Commercially, it had always looked marginal. As early as 1949, the Board of Trade presciently declared that the "tunnel was unlikely to either produce a significant reduction in transport costs . . . or, given the development of air transport, attract large amounts of additional traffic" (p. 18). The cost was huge with the prospect of large cost overruns, constant bickering between TML, Eurotunnel, and the two governments. Early on, it attracted worries about the need for a larger standing army given the prospect of Frenchmen marching through the tunnel. The potential for political disruption was large: in 1985, "Mitterand could gain as much electorally for being seen to reject an 'Anglo-American Trojan horse' as from an announcement that the project was going ahead" (p. 272). Yet, in the end, these headline features never appeared to be decisive. The military establishment did not agree about the early defense worries and all along there seems to have been a willingness to use the Tunnel as a positive symbol of good British—European relations (even Thatcher and Mitterand seemed to have good chemistry).

The more crucial issue was finance. If the project was commercially marginal, who would want to put up the money? Although Gourvish suggests it was a project with "obvious social benefits" (p. 383), I wonder what these are. There was no consumer surplus, i.e. a big fall in user prices to generate consumer gains not captured in revenues. There was a public interest in safety, environmental effects, and in security issues, but these are social costs. By the time construction started in 1987, 210 financial institutions were involved which delegated powers to twenty-two 'instructing banks' which in turn worked through four agent banks (Natwest, Midland, Crédit Lyonnaise, and Banque Nationale de Paris). They were constantly pressing for government guarantees and, in the end, 78 percent of the finance came, not from equity shareholders, but from bonds, bank loans, and credit. Why did they put up this money? One can only assume that the main risk was total collapse of the project but the constant interest of the two governments must have persuaded the bankers that such a risk was small. The resulting financial charges were massive. The...