Eurotunnel threatens to sue UK over cancelled subsidy
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Eurotunnel is rattling its sabre and threatening court action against the UK government over "a question of good faith". Dominic Perry reports.
CHANNEL TUNNEL operator Eurotunnel is threatening to sue the UK government over the cancellation of a subsidy designed to boost rail freight through the tunnel.
The firm, currently facing up to the threat of liquidation over its £6.21111 debt mountain, says it will take the government to court if no agreement is reached on reviving the L50m annual payout. It says the British Rail Board (BRB), part of the DIT. agreed to pay the subsidy to rail-freight operator EWS until 2052.The DfT plans to end the subsidy on 1 December.
Eurotunnel chief executive Jacques Gounon says he is not worried about the potential loss of traffic as he feels most rail freight will transfer to Eurotunnel's truck shuttle service. But he is threatening to sue over "a question of good faith", insisting: "A contract is a contract."
Gounon adds: "The UK government has a commitment. If it doesn't respect that then we will demand justice. We will take them to court for breach of contract. If there is no agreement then we will ask a judge to get BRB to comply."
Rail freight through the tunnel has never taken off, mainly because of the reluctance of Continental rail firms to clear paths to the Frethun terminal.
A meeting between Eurotunnel, EWS and the UK government is expected later this week.
Eurotunnel also faces a vote by its creditors on its restructuring plan on November in Paris.