Eurotunnel to slash lorry services

Debt-laden Eurotunnel is cutting the number of truck services it runs in a controversial bid to boost its income and slash costs.

The Channel Tunnel operator confirmed today that from January 1, it will reduce the number of lorry-carrying shuttles it operates each year to an estimated 60,000 from 71,000.

It plans to ask regular customers to supply annual forecasts of their daily use of the tunnel, which it says will help it to match supply to demand and avoid running half-empty trains.

Regular users who pay as little as £100 (€145.8) per truck at the moment could face a bill of as much as £750 (€1,093) if they exceed their forecasts by more than 25%.

Eurotunnel said the scheme will give priority to loyal customers over hauliers who use the tunnel as an “insurance policy” when ferry services are not running properly.

It claimed the response from customers had been encouraging, with 85% of next year’s contracts from its 150 biggest users already in place – more than at the same time last year.

However, newspaper reports have claimed that some firms have threatened to close accounts and to switch to ferry operators as a result of the new regime.

One recent report quoted three hauliers as saying they planned to stop using the tunnel, while a sales agency that handles tunnel bookings for thousands of trucking firms said it found it difficult to understand how the new plan would work.

Eurotunnel is introducing the move as part of its Project Dare recovery programme, which is designed to reduce its £6.4bn (€9.3bn) debt pile.

The scheme, which also includes measures to match supply to demand on its passenger shuttles and to cut the group’s 3,000 workforce, is targeting a £70m (€102m) rise in revenues by 2007.

However, Eurotunnel has warned that the measures alone will be inadequate to safeguard its future beyond the next two years and that it would still have a vulnerable cash flow at the end of 2005.

Eurotunnel’s new all-French management team drew up Project Dare after rebel shareholders elected them and ousted the previous board at a stormy annual meeting in Paris in April.

A spokesman for the group said today that it remained too early to say how many jobs would be lost.

He added that the company was still in discussions with its creditors about restructuring its debt and that a further announcement would probably come sometime in the New Year.

There has been speculation that Eurotunnel’s banks would lose patience and take control of the firm, which the previous board warned would probably result in investors losing their money.

However, the spokesman said: “Their (the creditors’) view is very much at this stage that they would rather work with the management, rather than take such drastic measures.”