From the Mirror:
The Channel Tunnel was sold by the Government yesterday for £2.1billion.
It would certainly be news if they had: for the government doesn\’t own the Channel Tunnel.
What they did sell was the Channel Tunnel rail link.
Interesting bit here:
The line allows speeds of 230 to 300 kilometres per hour (143 to 186 mph) and cost £5.2bn to build.
If you build something for £5.2 billion and can only sell it for £2.1 billion then doesn\’t that mean that the building of it destroyed value of £3.1 billion?
In short, that building high speed rail links is not value enhancing infrastructure but rather a way of pissing the wealth of the nation up against the wall?
They haven’t sold it, only leased it for a fixed term. Use of the line has been sold, not the line itself. When the current contract ends, govt will be able to “sell” it again.
A public sector infrastructure project is designed to benefit the users, not the builder, otherwise it would be a private sector project. As long as the benefit obtained by the users is greater than the amount of tax extracted to pay for it then it is value enhancing and the potential sale price is irrelevant.
A public sector infrastructure project is designed to benefit the users, not the builder, otherwise it would be a private sector project. As long as the benefit obtained by the users is greater than the amount of tax extracted to pay for it then it is value enhancing and the potential sale price is irrelevant.
Why can’t people pay for their own rail travel? This isn’t a dial-a-ride scheme taking the disabled to town which we can consider as a social good. It’s people travelling for business or leisure.
2.1bn over 30 years is £70m/year, or about a 1.3% return on the original investment.
“A public sector infrastructure project is designed to benefit the users, not the builder, otherwise it would be a private sector project. As long as the benefit obtained by the users is greater than the amount of tax extracted to pay for it then it is value enhancing and the potential sale price is irrelevant.”
Hmmm. As a taxpayer (who had to contribute to the construction) and someone who will probably never use this rail link, what exactly do I get out of this deal then?
I think that I (and the tens of millions of taxpayers in a similar position to me) might prefer that we kept the tax and those people that wanted to have a fast train link to the Continent paid for it themselves.
Alas, the conclusion is rather less all-embracing than you suppose. Most people’d settle for “building a high speed rail link under the sea via one of the world’s most expensive tunnels is not value enhancing infrastructure but rather a way of pissing the wealth of the nation up against the wall?” And that’s all you can say. It all depends, innit?
I preferred Thather’s method – let’s have the tunnel and let’s let the French pay.
“… building high speed rail links is not value enhancing infrastructure but rather a way of pissing the wealth of the nation up against the wall?”
Out of interest, how would the Victorian-built infrastructure we’re still using compare?
Peter – luckily, in those days, you could still con large numbers of retail investors into believing that railway projects’ enormous benefits would be private rather than social. Hence why a) they were all ruined b) we’re a wealthy, developed country.
These days, tax is viewed as a more appropriate vehicle than promoting stock market scams for building vital infrastructure with greater social than private benefits; I’m happy to join you if you wanna try the opposite.
I’ve even got a top hat, a tailcoat and a cigar.