This part of the report examines the reasons why the Department chose to restructure the deal for the Link when the original deal with LCR came close to collapse in January 1998. The cause of that near collapse was disappointing performance by the Eurostar UK business. Options considered by the Department included abandoning the project, putting in additional direct grants as LCR had requested and a restructuring. The Department chose the latter option as being one which offered the prospect of completing the Link without undue delay. The restructured deal which followed is in many respects more robust than the original. Section 1 of the Link is under construction and will be purchased on completion by Railtrack. LCR is required to construct Section 2 and Railtrack has an incentive to purchase it, but has not yet exercised its option to do so. |