7. Having decided that the design, build, finance, operation and maintenance of the link would be the responsibility of a private sector company, the then Government invited bids from the private sector. The competition aimed to allow bidders to manage the risks of the project and to create flexibility for potential private sector promoters. The Government was best placed to manage legislative risk, given the need for a Hybrid Bill to be passed to provide the necessary powers to construct and operate a transport infrastructure of this magnitude. It also specified minimum requirements (e.g. international train speeds of at least 225km/h on high speed sections) and made strategic decisions on issues such as the choice of route, but overall a framework was provided that allowed scope for innovation by the private sector.
8. As part of the proposed contract, the Government decided that EPSL would be transferred to the private sector promoter. As well as being a source of revenue for the promoter, this allowed a vertically integrated approach to be taken with respect to the provision of railway infrastructure and the operation of trains. While this contrasted with the domestic rail privatisation approach, the Department considered that the issues surrounding international services were quite distinct.
9. The studies undertaken between 1991 and 1993 had shown that a revenue stream from an existing service could make a valuable contribution to new infrastructure costs by putting money into the enterprise well before construction was complete, and at a time when raising debt and equity finance would still be expensive because of the high risks involved. It was felt that the two activities were so entirely inter-dependent on each other, that the same company should have control of both operations.
10. Also to be transferred to the private sector promoter was URL, which had designed and promoted the link route. The reasoning behind the transfer was not financial, but because of the intellectual property held by URL. By transferring URL, the promoter would then be able to take the design and promotion forward. EPSL, URL and certain other assets such as development land were therefore transferred from British Rail to direct Government ownership in preparation for the award of the Link contract. The Government laid down specific criteria in respect of how the promoter would be selected:
■ the amount of Government grant required;
■ the willingness of the private sector to take on risk.
11. In February 1994, a notice appeared in the Official Journal of the European Community announcing the launch of the competition. Expressions of interest were invited and nine consortia responded. Meanwhile, the Hybrid Bill to authorise the Link was introduced to Parliament in November 1994. The House of Commons convened a Select Committee, which had the power to require changes to the project, following its consideration of petitioners' cases during 1995. A similar process was undertaken in the House of Lords.