Leigh: Private sector needs to shoulder more risk

Edward Leigh today said that although the Channel Tunnel link is "a magnificent project and a boost to our national prestige" the economic justification for it remains "marginal".

He criticised the "inaccurate forecasting" of the number of Eurostar passengers who would use the link, saying: “It is essential with such projects that, from the start, estimates are realistic and provided by advisers who are clear-eyed about risks to revenue."

He warned that government promises of financial guarantees can weaken the incentives of the private sector to maximize their customers and added: "The Department [of Transport] has tried but continually failed to ensure that the private sector shoulder a high enough level of commercial risk."

Further, the Channel Tunnel link has shown that high demand for building resources leads to high levels of inflation in construction projects, Mr Leigh said, which might threaten the success of future projects, including the Olympics and the widening of the M25.