John Laing yesterday announced that the U.K. Department for Transport (DfT) and Agility Trains East (with its shareholders Hitachi Rail Europe and John Laing Investments) have achieved financial close on the East Coast Main Line fleet of trains for the DfT's Intercity Express Programme (IEP). All the financing is now in place to successfully deliver the IEP.
The Japan Bank for International Cooperation provided with a loan of about GBP860 million. The loan, provided in project financing, is cofinanced with private financial institutions comprising The Bank of Tokyo-Mitsubishi UFJ, Ltd.; Sumitomo Mitsui Banking Corporation; Mizuho Bank, Ltd.; Sumitomo Mitsui Trust Bank, Limited; Mitsubishi UFJ Trust and Banking Corporation; Société Générale, Crédit Agricole Corporate and Investment Bank, Lloyds Bank plc, and HSBC Bank plc; as well as the European Investment Bank.
The overall cofinancing amount adds up to approximately GBP2 billion. Nippon Export and Investment Insurance (NEXI) provides Overseas Untied Loan Insurance for the portion cofinanced by private financial institutions.
The IEP is an innovative scheme that covers the finance, design, manufacture, delivery into daily service and maintenance over 27.5 years of a fleet of 122 state-of-the-art Super Express trains for the Great Western Main Line and the East Coast Main Line. Among other things, the scheme brings guaranteed availability of the trains to the operating company. The trains, offering significantly increased capacity and higher service levels compared to the current fleet, will be manufactured by Hitachi Rail Europe in a new UK factory and maintained in facilities around the country.
Derek Potts, Managing Director for Primary Investments for John Laing, said:
"This financial close is proof that Agility Trains' vision and innovative proposals for this fleet and maintenance programme have secured the confidence of both the DfT and the financial community. John Laing is proud to be part of this ground-breaking programme, one of the largest in the rail industry that will improve transport, employment and economic development in the UK."
The Agility Trains consortium was awarded the contract for an initial fleet of 92 trains for both phases (East Coast and Great Western) of IEP in July 2012, at the same time as financial close was reached for the Great Western Main Line route. Furthermore, in July 2013, the Department for Transport confirmed a follow-on order for a further 30 electric trains.
Ali Dormer, Hitachi Rail Global CEO of Hitachi, said:
"This is a great milestone in the delivery of this transformational rail project. Hitachi and John Laing have formed a strong and enduring partnership which has successfully steered the project to financial close with the Department for Transport. The new company we have formed, Agility Trains East, will work with Hitachi Rail Europe to deliver, bring into service and maintain a fleet of 65 state of the art Hitachi Class 800 and Class 801 trains. Hitachi, John Laing and Agility are all committed to providing a step change in intercity train services in the United Kingdom though the successful implementation of this project."
All work is on schedule and the trains are expected to enter passenger service in 2017 on the Great Western Main Line and in 2018 on the East Coast Main Line.