ETL Eutelsat Communications S.a.

RNS Number:1486V
Eurotunnel PLC/Eurotunnel S.A.
09 February 2004



Embargo: Not for release before 0700 (UK time) on Monday, 9 February 2004



Eurotunnel proposes radical changes to cross-Channel rail industry



Eurotunnel has made proposals to the UK and French Governments and its industry
partners which seek to address the structural problems faced by the
cross-Channel rail industry.

The cross-Channel rail industry currently suffers from under-utilisation of
expensive infrastructure, financial losses and conflicting contractual
relationships. In particular the high level of access charges paid by rail
companies for the use of the Channel Tunnel is holding back traffic growth.
Eurotunnel's current financial structure leaves it with no scope to reduce these
charges unilaterally.

Eurotunnel has conducted a detailed analysis of the industry for over a year in
order to identify solutions for the complex issues underlying the industry's
difficulties. The key elements ofany solution must include the alignment of the
interests of the cross-Channel operators and clear incentives to increase
traffic through the Tunnel, within a stable financial structure.

Eurotunnel is proposing to significantly reduce access rates for train operators
in a manner which will align the incentives of the cross-Channel operators and
reduce their costs. This should enable Eurostar to increase its traffic to
existing destinations and would assist the introduction of new destinations such
as Amsterdam. Lower Tunnel access rates will also considerably increase the size
of the economically viable cross-Channel rail freight market. The reduced access
rates should therefore be partly compensated for by increased traffic.

To achieve these access charge reductions, Eurotunnel requires a more stable
financial structure, which would involve a significant reduction in the amount
of its debt and interest payments, as well as an extension of debt maturities.
Eurotunnel and its advisers have developed a series of detailed proposals to
meet these objectives. Eurotunnel now expects constructive engagement with its
industrial and financial partners.

Eurotunnel is seeking to reach agreement in principle during 2004 with
implementation in 2005. However, the issues are complex and there can be no
assurance as to the eventual outcome at this stage.

Announcing the proposals, Richard Shirrefs, Eurotunnel Chief Executive said:

"The #10 billion cost of the Channel Tunnel was financed entirely by the private
sector. In addition, taxpayers have directly or indirectly put around #15
billion into the infrastructure surrounding the Tunnel. However, traffic growth
for Eurostar and rail freight is strangled by high tunnel access charges and we
have too much debt to reduce them unilaterally. Taxpayers are not getting the
benefit they should for their money and Eurotunnel's shareholders have seen a
substantial loss on their investment."

"To enable reductions in Tunnel access charges, we need a definitive solution
which improves our profitability and gets our financing onto a sensible and
sustainable basis once and for all. The solution must also align the incentives
for the cross-Channel operators to promote growth in rail passenger and freight
volumes, and so bring wider economic and environmental benefits. The issues are
not simple but a successful outcome would provide benefits to all stakeholders,
including our shareholders."

Charles Mackay, Eurotunnel Chairman said:

"10 years after opening, it is clear that the contractual and financial
arrangements originally put in place for the cross-Channel rail industry have
failed to create an environment where the Channel Tunnel can realise its full
potential. It took courage, imagination and real political will to build the
Channel Tunnel. We need a little more of each to finally get the most out of one
of the great engineering triumphs of the 20th century."

                                    - END -

Notes to Editors:

Eurotunnel manages the infrastructure of the Channel Tunnel and operates
accompanied truck shuttle and passenger shuttle (car and coach) services between
Folkestone, UK and Calais/Coquelles, France. It is market leader for
cross-Channel travel. Eurotunnel also earns toll revenue from other train
operators (Eurostar for rail passengers, and EWS and SNCF for rail freight)
which use the Tunnel. Eurotunnel is quoted on the London, Paris and Brussels
Stock Exchanges.

The Treaty of Canterbury which set the original ambitious objectives for the
Tunnel stated that the Tunnel should "greatly improve communications between the
United Kingdom and France and give fresh impetus to relations between the two
countries, ..... contribute to the development of relations and exchanges
between the Member states of the European Communities and more generally between
European States ...."

The changes to the access rates will have no effect on the prices expected to be
chargedby Eurotunnel's shuttle businesses to its passenger and truck customers.

Media enquiries:

Kevin Charles, Eurotunnel, tel: + 44 (0) 1303 288728

Giles Croot, Brunswick Group, tel: + 44 (0) 20 7404 5959

Investor enquiries:

Xavier Clement, Eurotunnel, tel: + 33 1 55 27 36 27

News release no. 874







                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCQKFKBDBKBPBK

Eutelsat Communications (LSE:ETL)
Historical Stock Chart
From Jun 2024 to Jul 2024

Eutelsat Communications (LSE:ETL)
Historical Stock Chart
From Jul 2023 to Jul 2024