4.1 In 1998, the Department assessed the economic justification for the Link. Using the Government's 1998 Central Case forecasts for passenger volume and revenues, the Department concluded that the benefits exceeded the projected cost to the taxpayer by a ratio of 1.5:1. Our analysis of the Department's assessment, documented in our 2001 report, revealed some errors in the figures and the use of some unconventional methodologies, in particular attaching a monetary value to regeneration benefits, which was contrary to the Department's then guidance. After making adjustments to the Department's figures, our calculations revealed a reduced benefit/cost ratio of 1.1:1.
4.2 Demand for Eurostar services has, since 1998, never met the Government's 1998 Central Case forecasts and, furthermore, has not met the Government's 1998 Downside Case forecasts, which when used to calculate the benefit/cost ratio resulted in a ratio less than 1, even after including regeneration benefits. In our 2001 report, we, therefore, found that justification for the Link was heavily dependent on wider and unquantified policy benefits, such as national prestige, that the project was thought to bring.