THE Channel tunnel rail link could cost the public as much as £9 billion — more than four times earlier estimates — despite John Prescott’s assurance that it would represent a “good deal for taxpayers”, write Christian Wolmar and Jon Ungoed-Thomas.

The 68-mile route from the Channel tunnel to London’s St Pancras station is heading for financial crisis because profits from Eurostar, which were intended to fund the scheme, have not materialised.

Proposed domestic services on the high-speed line may be scrapped to reduce the spiralling cost to the taxpayer, which is now estimated at up to £360 for every household in Britain.

Work on the rail link — the first major line to be built since Victorian times — began in October 1998. The section from London to Fawkham Junction in Kent opens next September. When the final section is completed, by 2007, it will cut the time between London and the tunnel to 35 minutes.

London and Continental Railways (LCR) is on schedule and within its construction budget of £5.2 billion, but projected costs to the taxpayer are rising rapidly because of the poor performance of Eurostar, which is losing £100m a year.

In addition to underwriting a bond issue of £3.75 billion that LCR wants to increase to £5.25 billion, the government is paying the firm grants that total £3.2 billion, compared with initial estimates of £1.8 billion.

Taxpayers will also have to pay for subsidies of up to £1 billion for services using the line. The Strategic Rail Authority admits the likely cost of these subsidies and of building new trains means domestic services may not be allowed to use the line.

Though the Department for Transport and LCR point out that construction worth up to £8 billion has been stimulated by the line, the financial disarray surrounding the project will be a severe embarrassment for Prescott, the deputy prime minister. In June 1998 he insisted it would require no significant extra government funding.

However, last year the House of Commons public accounts committee compared the project with the Millennium Dome and warned that taxpayers would foot the bill if the complex funding scheme failed.

Prescott’s rescue plan for the link was based on an increase in passenger numbers on Eurostar. But there has been a fall in the number of tourists using it after the September 11 atrocities and last year business-class travel fell by 15%.

The first tranche of £1 billion is due to be repaid on the bond in 2010, but payments are being rescheduled because the developers realise Eurostar’s passenger targets cannot be met.

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