Page 48 - merged.pdf

•28 The 100 Greatest Business Ideas of All Time

Idea 22 – A tunnel vision

Mentioned in every textbook on the subject of investment is the need to look at

investment in equities as a long-term play. A lot of newspaper columns remind

potential investors that they should put money into the stock exchange with a timespan

in mind of at least five years.

In this regard Eurotunnel is the reductio ad absurdum that proves the rule. But

look at the affairs of the company more closely and as a long-term plan, and its

inclusion in the section ‘licence to print money’ makes more sense. It is true that the

1998 accounts show that the company made an underlying loss of £215 million.

The financial restructuring gain, caused by the reduction of the past interest bill,

converted this loss into a small profit of £64 million. It is also true that shareholders

funds were stated at £1.06 billion while long-term loans stood at £8.29 billion.

But, like the pundits say, look at the long term. After all, the debate

The sharehold- on whether a fixed link should be built started 200 years before the treaty

ers should have signed between the UK and France in 1986 made the tunnel possible.

plenty to look One of the earliest plans came from a French engineer, Albert Favier,

forward to, or who proposed a tunnel for horse-drawn vehicles with an island in the

at least their middle to allow for changing horses. If you think the shareholders have a

descendants long wait for return, consider the case of Thom de Gamond who worked

should. on a fixed link for some 40 years of his life, culminating in another tunnel

plan in 1868. Some progress was made in tunnelling in 1880 until the

British Government got cold feet and called it off.

Political opposition remained the stumbling block in the first half of the twenti-

eth century, although some big guns, such as Winston Churchill and Aneurin Bevan,

supported it. The need for political support changed in the Thatcher years when a

joint study indicated that a two-tunnel scheme was a possibility and tenders were

invited for a privately financed fixed link.

It was hard to argue with the international panel of construction industry ex-

ecutives and editors when they named the tunnel as the top construction achieve-