The operator of the Channel Tunnel said it has cancelled all future rail investments in the UK because of an expected tripling in its business rates bill. Eurotunnel has scrapped plans to reopen a freight terminal in Barking and to run a new direct freight service from Lille and will make no further spending commitments in the country, its chief executive Yann Leriche told the FT.
From April its business rates bill will rise from £22mn to £65mn, under current proposals from the Valuation Office Agency that sets rates for the government. The expected increase “makes all of our investments lossmaking, so we won’t be making any more investments,” he said. “As of today, we have frozen our investment in rail assets in the UK.” The two freight projects would have cost around £15mn, and allowed the company to increase capacity in the tunnel by shifting trucks that run on trains during the day to freight-only trains that typically run at night.
The company also passes on around half of its business rates bill straight to train operators including Eurostar — and in the future
Virgin Trains.
Leriche warned that adding “tens of millions” to the bill for the operators would increase fares and delay them opening new routes or reopening passenger stations such as Ashford and Ebbsfleet. More than 8,000 trucks a day cross the English Channel between the UK and France via the tunnel or through the ports, but Eurotunnel only operates three dedicated freight trains a day — the equivalent of around 90 trucks. Reopening its Barking freight terminal — a project on which it was about to embark alongside Network Rail — would have allowed the company to offer more services, and stem the decline of rail freight crossing the channel, he added.
Its proposed service from Dourges near Lille would also have seen truck trailers transported straight to Barking, preventing lorries from adding to congestion north of Paris and freeing up capacity in the wider transport system.