Eurotunnel's 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.

Financed entirely by private debt, the tunnel's cost overran 64% to £9B and traffic was half the projection, leaving Eurotunnel 20 years in debt.

The budget was £5.5B; the final cost was £9B — a 64% overrun.

Traffic was approximately half the projected volume.

The project was financed entirely by private debt, with no government backing.

Eurotunnel spent 20 years restructuring its debt before returning to profitability.

A mega-project financed by private debt is a bet on the traffic forecast. The Channel Tunnel's forecast was wrong by 50%, and the debt was the full £9B. 'Build it and they will come' is a hope.

Eurotunnel restructured its debt multiple times and returned to profitability in the 2010s. The tunnel is now a critical transport link. The case is cited as an example of how mega-project financing can create decades of financial distress when the projections are wrong.