Poorer than expected performance of Eurostar UK put the original deal at risk

1.1  LCR won the Department's competition to build the Link and operate Eurostar UK under a 999 year concession because its bid required the lowest level of direct grants and, in the Department's view, had a more favourable distribution of risk than proposed by the other shortlisted bidder for the project, Eurorail CTRL Ltd. LCR's shareholders are listed in Figure 1. The amount of direct grants included in LCR's bid was related to its forecast of Eurostar UK revenues, which were higher than its competitor. When actual Eurostar UK revenues grew considerably less rapidly than forecast, the project was no longer seen as a good investment by private sector investors and LCR realised that it could no longer raise the finance needed to construct the Link and operate Eurostar UK.