The Channel Tunnel cost £9B — 64% over budget — with half the projected traffic

The Channel Tunnel, connecting England and France under the English Channel, was one of the most ambitious engineering projects of the 20th century. The original budget was approximately £5.5 billion. The final cost was approximately £9 billion — a 64% overrun.

The project was financed entirely by private investment, with no government funding. The revenue projections assumed traffic volumes that proved wildly optimistic: actual traffic in the first years was approximately half the projection. The combination of cost overruns and revenue shortfalls left Eurotunnel with a debt burden of approximately £9 billion.

Eurotunnel spent 20 years restructuring its debt before returning to profitability. The case illustrated the danger of financing a mega-project entirely with private debt based on optimistic traffic projections, and how the 'build it and they will come' assumption can be catastrophically wrong when the project's economics depend on volumes that don't materialize.