This part of the report examines the economic justification for the scale of Government support the Link will receive. It shows that the original project could not have proceeded without public sector grants, and that the Department's case for supporting the project depended on an assessment of whether the economic benefits of the Link would outweigh its costs. The Department estimated passenger benefits and the benefits in terms of economic regeneration that it expected would flow from the Link. In addition, Ministers had regard to wider policy benefits which were not quantified. Using the Department's own assumptions and methods for quantifying benefits, the estimated net benefits of the Link are worth some £1,000 million. But there is scope for debate about this calculation. On a conventional basis the outcome would have been much lower. Moreover, Eurostar UK performance has so far been well below that envisaged in the Government Central Case. This implies that the benefits would be lower and the costs higher than in the Department's estimate. What this means is that the economic justification for public grants to support the project is heavily dependent on the wider policy benefits envisaged by the Government. |