Channel Tunnel: a typical example of European crony capitalism and corruption

For those of you who have the joy of leaving in London and go and forth to Paris, it's not going to be news. EuroTunnel is the company which built and currently operates the Channel Tunnel, while Eurostar is the train operator that has a monopoly on the passenger trains that cross the tunnel.

It's not unusual to have to pay £400 ($600) for a day return ticket, and an average return ticket price for a  week-end from London to Paris is usually £200 — I often compared the price I would have paid for a flight to NY from London, and most of the time, flights to NY seem to be about the same price as train tickets to Paris. How ridiculous is that?

One obvious issue could be that Eurotunnel charges a very high price for the crossing. That seems to not be true, as they will charge you about £40 for a car and its passenger, one way. So it must be coming from somewhere else... I knew the reasons, but it's good that voices are now raising and that changes might be on the way.

See how crony capitalism as granted a monopoly to Eurostar, and that stupid rules are preventing any competition. One obvious issue is then that Eurostar must have greased some hands in order to obtain such stupid regulatory rules and its monopoly, for a service that is very often subpar compared to other train operators.

Please see this interview from Eurotunnel's CEO on the German newspaper Frankfurter Allgemeine. I happen to have read it in German and French, but I'm pasting from the Google translation that I have tried to improve:

So far only drive trains of the operator "Euro Star" by the Euro Tunnel. Jacques Gounon tunnel boss wants to break this monopoly and force the competition under the Channel.

23rd July 2010
Why the Euro Star is the only operator of high-speed drive trains through the tunnel?

Euro Tunnel does not determine the rules. France and Britain but have been defined before the opening of the tunnel, these provisions so that the trains must be 400 feet long. This is connected with the passages to the service tunnel in case of evacuation. Only the company € Star today has such features. The trains of the competitors are usually half as long.

What do you think about it?

This requirement is outdated and has three major disadvantages: Today such long trains are not standard, and thus extremely expensive. Second, it would allow more train connections with shorter intervals, as for example between Brussels and Paris every half hour, instead of the three-to four-hour gap in the Euro Star. But you would need shorter trains like the ICE, the TGV or Thalys. The third point is a weakness in security, we want to improve: The 350 passengers of a normal train, you can much more easily than evacuate the 700 people in the Euro Star. The approximately € Star Snow breakdown showed last December. The head of Deutsche Bahn is right in his criticism that his trains can go through all the tunnels, not only through the Channel Tunnel. There is no reasonable justification for it.

Find ear of the politicians?

We have already made some progress. In the past year has been to - not least through our insistence repealed - the requirement that each train can be divided in the middle so that one half to the UK and the others back to France. But one must also know that Euro Star is a company that belongs to the French majority state-owned SNCF and the British government. The shareholders are therefore those that determine the safety regulations.

So if there are competitors, is € Star then sit on his long face?

No, for new providers, such as the German railways will be focused on regions that are processed does not yet exist. There are about a market for the connection between the City of London, Amsterdam and Frankfurt. All providers can attract new customers because people will find favor and give up on the train is increasingly the plane.

Is there enough "slots", ie the time window for new trains?

The Channel Tunnel is indeed the busiest train line in the world: 300 different convoys pass through daily. However, the tunnel is only busy half. So you could simultaneously increase the number of trains, safety and convenience for passengers.

Euro Tunnel of course deserves more, if more trains pass through your tunnel.

Of course. It is also important so that the high return on investment in the tunnel at last. The shareholders have lost about 3 billion euros, the banks in the wake of the financial restructuring around five billion euros.