SMBC Leasing has joined a consortium comprised of investment funds and the train manufacturer Bombardier currently bidding for a major stake in the Thameslink programme.
The other members of the consortium include Deutsche Bank-owned fund RREEF, infrastructure fund Amber, Serco as well as Bombardier.
If it wins the bid for the project – which is currently being procured by the Department for Transport – the consortium will lease 1,200 new carriages over 20 years via a special purpose vehicle (SPV) to the operator of the Thameslink franchise. The SPV, in which each member of the consortium owns an equity stake, is currently being set up by the consortium. RREEF is understood to own the largest share in the SPV with a circa 40% stake.
A rival consortium led by Siemens is also bidding for the Thameslink project. Leasing Life understands its members include 3i Infrastructure Fund and Innisfree, the UK infrastructure investment group.
The rolling stock project is part of the much larger Thameslink programme involving the building of new stations in and around London and upgrades to existing ones, as well as the laying down of new railway track. The programme was given the greenlight by the UK’s transport minister Philip Hammond in November this year.
The programme’s leasing part, which is valued at around £1.5bn, is one of the largest deals of its kind in UK rail leasing history. The trains will run between Bedford and Brighton and, according to a recent statement by Hammond, will “virtually double the number of north-south trains running through central London at peak times”.
At the end of March next year, the Department for Transport is due to announce the winning bidder for the rolling stock part of the Thameslink programme. Besides leasing the trains, the winning consortium will also be responsible for the maintenance of the trains over a 30-year concession period, as well as the construction of two new maintenance depots.
Sources said that the government was keen to use a leasing model for the project, even though a private finance initiative (PFI) framework is being used for the Crosssrail project, a similar scheme to Thameslink involving the provision of new rolling stock and infrastructure for lines across London.
SMBC Leasing has a solid background in rail leasing in the UK. In 2008, as part of a joint venture with National Australia Bank, it was awarded a contract by Transport for London to lease 54 Class 378 units for use on five London overground lines. These included the East London Line, the Gospel Oak to Barking Line, the North London Line, the West London Line and the Watford DC Line.
News of the involvement by investment funds in the Thameslink programme follows the recent announcement that an investment fund owned by the Australian bank Macquarie has bought a stake in the Russian rolling stock leasing company Brunswick Rail.
It is understood that delays are likely to take place to the procurement of trains for the Thameslink programme with stock now not expected to be brought into service until 2017.
Under the revised proposals the rolling stock will be introduced between 2014 and 2017, with the bulk coming into service in between 2015 and late 2017. This is a change from original proposals under which the stock was expected to be fully procured by 2015.
The reason for the delay is understood to be linked to unexpectedly costs involved in the building of infrastructure at London Bridge station. The changes to the procurement process have meant that the two bidders for the project now have to submit slightly revised tenders.