Although the Private Finance Initiative deal for the construction of the Channel Tunnel Rail Link was in many respects unique, the lessons to be learned from the project’s near collapse are not. This NAO Full Report makes three key points: in negotiating with the private sector the Department of the Environment, Transport and the Regions achieved its key objectives through a restructured deal in 1998 that is in many respects more robust, with a better allocation of risk, than the original deal signed in 1996; however, the complex financial arrangements agreed during the restructuring will require significant and long-term Government support for the project; as there is room for debate on the economic case for the Link, the justification for the project is heavily dependent on wider policy benefits envisaged by the Government.
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