The PFI to build the Channel Tunnel Rail Link  was awarded to London & Continental Railways Limited (LCR) in 1996. At the end of 1997 it had become clear that optimistic forecasts for the operating performance of Eurostar UK had scuppered LCR's efforts to raise all the money.  The deal was restructured.  This report examines: a) the reasons for restructuring the deal; b) the public expenditure implications; and c) the justification for the direct grants which the Link required