Business Case Studies, Operations and Project Management Case Study, Eurotunnel, Troubled Waters

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Case Title:

Eurotunnel: In Troubled Waters

Publication Year : 2004

Authors: Sandeep Chaurasia & T Phani Madhav

Industry: Transportation

Region:Europe

Case Code: OPM0003

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
The Channel tunnel is a 50.4 km long tunnel rail link under the English Channel between UK and France. The Channel tunnel is considered to be one of the greatest civil engineering projects of Europe. Both British and French governments decided against using public money and the contract was awarded to Eurotunnel Group, a major player in the European railroad industry. The project took eight years to complete and became operational on May 6 th 1994. However, with most projections about the traffic to utilise the Channel tunnel not materialising, Eurotunnel ran into losses and by 2003, and was submerged in a debt of £6.4 billion. With the situation deteriorating, a group of shareholders approached the court for a change in the management of Eurotunnel.

Pedagogical Objectives:

  • To understand the financial and operational problems faced by Eurotunnel and how it is restructuring its operations and financials to tide over the crisis
  • To discuss whether the change in the management would solve the problem for Eurotunnel by increasing the traffic through the Channel tunnel or will the tunnel end up being an engineering wonder that people would like to admire but not use.

Keywords : Government and Business Environment Case Study, Eurotunnel, Channel tunnel, Construction, Raising finance, UK, France, Financial problems, Losses, Debt restructuring, Passenger services, Freight services,Business Environment Case Study, Channel tunnel railway link, Traffic volumes, Toll tariffs, Shoring up the balance sheet

Contents:

  • Channel Tunnel: A Journey through the Past
  • The Financial Crunch
  • The Operational Front
  • The Path Ahead

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