UK retail giant Tesco has been hit with a compensation bill of over £8.5m after building work on the site of a proposed Tesco store led to the collapse of a rail tunnel.
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The future of the store is now in doubt, reported the Guardian, as the company faces mounting costs and increased opposition to the idea.
Part of the tunnel in Gerrards Cross, Buckinghamshire, collapsed on 30 June after soil had been piled on top to create a flat surface for the as-yet-unbuilt Tesco store and its car park. The collapse led to a seven-week closure of the Chiltern railway line, which provides a rail link between London Marylebone and Birmingham Snow Hill. Commuters have been hit with extended journey times and replacement bus services, forcing the rail operator to halve fares whilst the tunnel is closed.
Costs of £8.5m have been passed onto Tesco, including the cost of halving fares, compensation to season ticket holders and the cost of the replacement bus service, reported the Guardian. Tesco has also agreed to pay for Chiltern’s advertising campaign to win back lost customers and may face further costs if the train operator’s business continues to suffer as a result.
If Tesco wants to continue with its plans to build the store, it will have to overcome increased local opposition, as well as understandable concerns from Network Rail, which owns the actual rail track, and Chiltern Railways.
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By GlobalData“The scale of this disaster and the difficulties this has created for our business is beyond anything we could have imagined,” Catherine Porter, managing director of Chiltern Railways, was quoted by the newspaper as saying.
Catherine Edwards, a spokeswoman for Tesco, told the Guardian: “Our priority has been to get the line reopened. I have seen none of the figures so I have no idea how much it has all cost. We have to take stock of what happens next.
“No decisions on the future of the store have been made.”
