Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Israel-Palestinian territories: can there be an end to the historic conflict?

Read more

AFRICA NEWS

Zambian President Michael Sata dies aged 77

Read more

FOCUS

Lebanon: Syrian civil war spillover heightens tensions in Tripoli

Read more

ENCORE!

Art show: From Frank Gehry's glass sails to Paul McCarthy's sex toys

Read more

INSIDE THE AMERICAS

US midterms: The battle for Colorado

Read more

IN THE PAPERS

Dominique Strauss-Kahn reacts to suicide of his business partner

Read more

BUSINESS DAILY

The robot workforce is coming

Read more

WEB NEWS

Video highlights problem of street harassment in New York

Read more

DEBATE

The battle for Kobane: Peshmerga, FSA join fight against IS group

Read more

Eurotunnel sees the light

Latest update : 2008-04-08

Long beset by financial problems, the rail company Eurotunnel has registered its first ever profit. Chairman Jacques Gounon has announced he will pay a first dividend to shareholders in 2009. Economics journalist Reuben Easey analyses.

It was with great satisfaction that Jacques Gounon, Eurotunnel’s CEO, announced Tuesday’s figures. He says the ‘new’ Eurotunnel is nothing like the one of old, which struggled almost from the moment it left the station.

Construction costs for the tunnel were around 16 billion euros, more than double the initial estimates – and at the insistence of the then British Prime Minister Margaret Thatcher, ‘not a penny’ of public money was used to finance it.
Consequently, the company has been forever burdened by enormous debts to the banks which put up the cash.

Moreover, estimates of passenger numbers proved to be hugely over-optimistic. But the major factor which has allowed it to finally start turning a profit is the enormous restructuring of its debt which took place in 2006.

Eurotunnel was able to wipe out its debts by repaying the banks in the form of shares. This has placed Eurotunnel on a far more even footing. The upturn in fortunes is also thanks to increased traffic through the tunnel, both on its freight service, and the passenger trains which connect London’s Saint Pancras to Paris’ Gare du Nord.

Those who have suffered most have been the firm’s small shareholders, the vast majority of them French. Having seen the value of their investments dwindle to virtually nothing, this is at last something for them to cheer about.  

Date created : 2008-04-08

COMMENT(S)