4.
The Concession is a simple idea
J
it is a right to invest in, to develop and profit from a geographic or commercial territory under the control of the Sovereign Powers granting it. That right to invest, develop and profit is protected credibly for a reasonably long period of time - over 50 years in our case. That Concession is therefore a massive, intangible asset somewhat like, but even less tangible than, a licence from governments to develop some massive oil field under the sea. Secured on that asset, as a source of future revenue subject to efficient development, large sums of capital can be raised and have been by Eurotunnel. Against the right to charge TOLLS on future traffic to be won in competition against air and sea transport, Eurotunnel has raised over £8.75 billion sterling: which is about 17 billion US dollars, or 132.65 billion Hong Kong dollars or 2,257.5 billion Yen - all of it, I repeat all of it, from the private sector, in equity raised by public issues and private placements to investors and in syndicated bank loans - the latter totalling £6.8 billion sterling equivalent to make them the
largest private sector syndications in history. IT CAN BE DONE!
So the simple principle of the Concession, protected by a treaty between two Sovereign Powers, has given rise to a truly massive financial structure, and to the largest engineering project in Europe in the 20th Century.
I do not say that every aspect of the implementation of that project has been simple, efficient or successful. Everyone knows we have had our problems.
Let me now use some slides to explain what we are doing. This is the Eurotunnel project: (Sir Alastair showed and commented on 15 slides).
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