Channel tunnel operator Eurotunnel has cut non-shuttle rail freight prices almost in half in an attempt to stop the decline in its traffic.

Chairman Jacques Gounon said there had been a danger that this business would disappear altogether without the price cuts.

He said the price cut was the last limit at which the company could take measures without taking the risk that there would be no tonnage next year.

The price cuts, which follow a 25 percent drop in non-shuttle rail freight traffic in the third quarter to 278,612 tonnes, will principally benefit established British and French operators EWS and SNCF, but also to a lesser extent Eurotunnel’s own non-shuttle rail freight subsidiary, Europorte 2.

Under the new pricing structure, Eurotunnel is charging an average US$4,200-$5,600 per train.

Pricing has also been simplified, with the previous rate per tonne replaced by a rate per train, taking account of speed and time of passage. Eurotunnel is aiming to lift rail freight volume back from around one million tonnes per year to its 1997 level of three million tonnes per year in the next three to five years, and six million tonnes in five to seven years.

It said that it can accommodate an annual traffic transfer from other transport modes of four billion tonne-kilometres of freight.

It said this figure represents an eight percent increase in rail-freight volumes in France, and a quarter of the French government’s rail freight growth target.

In announcing the new pricing structure now, Eurotunnel is hoping to persuade the French government to follow the example of its British counterpart in providing a $14.3 million subsidy to cover fixed frontier infrastructure charges on the French side of the tunnel.

These charges, exacerbated in the past by heavy security charges, have been the principal cause of its loss of competitiveness in non-shuttle rail freight, according to Eurotunnel.

It argues that, in the context of the existing open access approach to rail freight, such charges should now be borne by the public purse.

Gounon said Europorte 2 was looking principally to attract a share of the traffic passing between Britain and continental Europe through North Sea ports.

He said if the company takes even a tiny portion of what is passing through those ports, it will be great for the company.

He added that Eurotunnel would also be looking to make use of its recently established partnership with the French port of Dunkirk to establish it as a hub for freight bound for Britain as an alternative to overloaded British ports.

Eurotunnel has also signed a partnership agreement with British company Peter Colby Commercials. Under the pact, the two companies will set up a high frequency rail service that will link industrial regions in northern England with the Dunkirk container terminal.