LCR has reduced the expected call on the access charge loan by reducing its cost of capital

3.7  While the lower than expected revenues from Eurostar UK adversely impact on LCR's financial position, LCR cut its expected cost of capital from a weighted average of 8.9 per cent in 1998 to 5.2 per cent in 2003. This was achieved principally by replacing the return required by Railtrack Group, for taking construction risk for Sections 1 and 2, with the cost of debt raised against revenues guaranteed by the Department.

3.8  Even after allowing for the payment of £295 million (2002 prices) to Railtrack Group for its interest in Section 1, LCR calculated that the 1997 present value of the savings from the reduced cost of capital would exceed £550 million.18

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18  £990 million (a 1997 present value in 1997 prices calculated by discounting cash flows using the Government's current discount rate of 3½ per cent).