Digging beneath the iron triangle: the Chunnel with 2020 hindsight

Abstract The Channel Tunnel project (the Chunnel) to connect the UK and France was the largest privately financed transport megaproject of the 20th century. Despite nearly 25 years of successful operation and growing profitability, the Chunnel is frequently portrayed as a failure. Some authors even suggest that it should never have been built. If one looks beyond the so-called ‘iron triangle’ criteria of keeping to time, cost and scope, and the project’s early financial troubles, reality looks rather different. This paper takes a holistic, multi-disciplinary, multi-stakeholder long run perspective to dig beneath the iron triangle to argue that the Chunnel was not just an extremely successful megaproject that has delivered real economic benefits, but also an important agent of change. The Chunnel made a significant contribution to modernising Europe’s transport infrastructure on its journey towards sustainability and in improving knowledge about how to deliver privately financed megaprojects through public-private partnerships. With perfect 2020 hindsight on demand risks and cost overruns, a public sector investment subsidy of around 50% of the capital costs would have been required to make the project financially attractive to private investors, whilst generating an economic rate of return over the life of the concession estimated between 3 and 6%.