MegaProject 1256: UK Department for Transport launches market-sounding for multi-billion rail PPPs involving Heathrow Airport
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The UK Government's Department for Transport (DfT) has published prior information notices for market sounding events for two rail projects - the Western Rail Link to Heathrow (WRLtH) and the Southern Rail Link to Heathrow (SRLtH). Heathrow is a major international airport - the second busiest in the world - located 23km west of London.
The WRLtH project involves the development of a proposed new rail link between the Great Western Main Line in the Langley area of Berkshire, the county to the west of London, and Heathrow Airport Terminal 5. DfT wishes to explore through market sounding the appetite for investment and/or participation in the project through a PPP option. The total construction cost of the project is estimated to be between GBP700 (~US$950) million and GBP900 million (US$1.2 billion).
The SRLtH is a proposed new rail link connecting Heathrow Airport to the south of England. It is envisaged that it will serve Waterloo station in London, Surrey and Hampshire (two counties in the south). Though the project is still at a conceptual stage of development and thus the strategic aims, output specification, routes and infrastructure solutions are not yet defined. The capital cost of the project is estimated to be between GBP700 (~US$950) million and GBP1.4 (US$1.9) billion.
DfT's market sounding for the SRLtH will explore the market appetite for developing proposals for the project and the appetite for sharing the risk of the development process. The authority has stressed that this does not represent the start of a procurement process, but could shape a potential future procurement process.
DfT plans to hold engagement sessions for the WRLtH in June and July 2018. Should the Department choose to proceed with the development of the project through a PPP model, it will publish a contract notice for the PPP tender in July 2019. The contract would cover the financing, delivery and maintenance of an approximately 5km railway, with rail systems fit out, which includes a new twin-bored tunnel and cut-and-cover element, to connect into existing tunnels at Heathrow Terminal 5.
A specific event launching the market sounding for the SRLtH is being held on 24 May 2018 in central London. Following this, DfT will provide an update on the next steps for the development of the project in autumn 2018.
This notice concerning the SRLtH follows an invitation to developers to submit proposals for the project that DfT published in March. A key criteria for the proposals was that they were privately financed. The notice does not mention the previous invitation, so it is unclear whether the latter is still valid. The submission deadline was 31 July 2018.