Virgin joins consortium bidding for Tunnel link: London and Continental bid will emphasise rail alternative

RICHARD Branson's Virgin Group has joined the London and Continental Railways consortium bidding to build and run the pounds 2.7bn high-speed rail link between London and the Channel Tunnel.

Virgin had talked to several of the bid consortia but announced yesterday that it was joining the group led by Bechtel, the US construction company. London and Continental also includes Ove Arup, the engineering consultants, the coach operator National Express, cement group Blue Circle, and Sofrerail, the French rail consultants. They are advised by SG Warburg, the merchant bank.

The winning consortia will take control of Waterloo International rail terminal and acquire European Passenger Services, the company due to start running trains through the tunnel later this year. Waterloo station is next to County Hall, which Virgin and Japanese partners are developing into a hotel and leisure complex.

Other bidders for the rail link are Eurorail, which includes BICC, GEC and Trafalgar House; a group led by Hochtief, a German construction group, and Siemens; and Union Link, which includes Taylor Woodrow and Mowlem from the UK, and Philip Holzmann from Germany.

Virgin said the other bids were too construction-led, whereas London and Continental laid greater emphasis on marketing the rail link as a rival to short-haul airline services.

Airlines are already responding to the threat, and British Airway's recent battle to gain access to France's Orly airport was seen as an attempt to take advantage before tunnel services begin.

Virgin has few short-haul airline interests, and said it was an ideal opportunity to link its brand name to transport services within Europe.

John MacGregor, the Transport Secretary, is expected to reduce the list to two bids this year, with the winner chosen by April. With fast train links already connecting Brussels and Paris, there is concern about delays over the British link which is not expected to be completed before 2002.