A fifty-kilometre stretch of railway lies buried beneath the English Channel, carrying more than twenty million passengers a year and roughly a quarter of all British trade with the European mainland. Today the tunnel feels indispensable, an obvious artery between Britain and the continent. Yet thirty years ago this same piece of infrastructure nearly destroyed the company that built it and wiped out a generation of small shareholders.
The idea was not Margaret Thatcher’s. As early as 1802, the French engineer Albert Mathieu submitted plans to Napoleon for a horse-drawn tunnel beneath the Channel, and over the following two centuries the project surfaced repeatedly, each time blocked by either military anxiety or financial impossibility. It was only in 1986 that Thatcher and François Mitterrand signed the Treaty of Canterbury and committed to building the tunnel — entirely with private capital, without a penny of British taxpayer money. That last condition, on which Thatcher insisted, became the seed of every financial disaster that followed.
The construction itself was a punishing race against geology, technology and time. Boring began in 1988, with multiple tunnel-boring machines advancing from each side of the Channel and required to meet under the chalk seabed with surgical precision. In December 1990, the British worker Graham Fagg shook hands with his French counterpart Philippe Cozette in the middle of the service tunnel, the alignment off by just thirty centimetres horizontally and eight vertically — a figure close to perfect for the engineers and already too late for the shareholders. Ten workers died during construction. The budget swelled from roughly £4.8 billion to around £9.5 billion, an overrun of eighty per cent. When Queen Elizabeth II and Mitterrand cut the ribbon in May 1994, the applause was warm; the balance sheet was not.
In its first year of operation Eurotunnel posted a loss of £925 million on debt of around £8 billion. Actual passenger and freight volumes fell well short of the rosy figures in the prospectus. Shares issued at £3.50 in 1987 had peaked above £11 in 1989 and collapsed to historic lows by the time the tunnel opened. In 1995 the company suspended payments on its debt; in August 2006, after years of half-restructurings, it filed for safeguard protection at the Paris Commercial Court, the French equivalent of bankruptcy protection. Only in 2007, when a debt-for-equity deal led by Deutsche Bank, Goldman Sachs and Citigroup was forced through, did the company finally post its first annual profit — a modest €1 million. The original retail shareholders were almost entirely wiped out.
For a moment, every French and British saver who had bought into the original offering concluded they were on a sinking ship; the press reached for the easy verdict of a white elephant of the century. But the tunnel itself — the rails, the bored hole through chalk — had not lost a single inch. It still ran trains, moved trucks, ferried passengers. The shareholders had gone bust; the tunnel had not. The company was renamed Getlink, the concession extended to 2086, and from 2007 onwards it has been profitable every year. In 2025 Eurostar carried a record 11.8 million passengers through the tunnel, and both Virgin and Italy’s Trenitalia are now queueing for permission to launch competing services.
The structural irony is worth dwelling on. Capital markets keep time in quarters; major infrastructure keeps time in generations. The retail investors of the late 1980s were trying to buy a hundred-year asset on a ten-year horizon. Within ten years the asset could neither return capital nor pay dividends, and so it duly became a shareholders’ graveyard. But the tunnel’s actual users — the British and French economies, the half-billion passengers who have crossed it since opening, the freight that accounts for roughly a quarter of UK–EU trade — were drawing dividends from an entirely different clock. Infrastructure converts present money into future convenience. Anyone who measures it in quarterly returns will reach the wrong conclusion.
This is the deep contradiction inside Thatcher’s all-private-capital principle. Private capital is necessarily short-sighted because it is accountable to shareholders; the state is, in principle, accountable across generations. Loading a generational asset onto quarterly capital is like asking a sprinter to run a marathon — he is not slow, merely pacing the wrong race. France understood this instinctively: the LGV Nord high-speed line connecting the tunnel to Paris was finished before the tunnel opened. Britain dragged its feet until 2007 before completing High Speed 1 to London. The same tunnel, two very different paces — which is part of why the early years were so financially brutal.
After thirty years the Channel Tunnel offers two entirely different stories. On the investor’s page it is a casualty; on civilisation’s page it is an artery. Both are true; the question is which clock you read by. Score it by the quarter and the project lost decisively. Score it by the century and it has won quietly, year after year. Fixate on the former and you will miss the latter — and miss, too, how a single tunnel has stitched together two countries, two histories, and two centuries beneath the sea.
