Financial close for UK’s Intercity Express PPP

A consortium including John Laing has closed phase two of the £5.2bn project, which includes a large banking group.

The UK government’s Department for Transport (DfT) and the Agility Trains East consortium – in which Hitachi Rail Europe and John Laing Investments are shareholders – have reached financial close on phase two of the UK’s Intercity Express Programme (IEP), which has an overall value of £5.2 billion (€6.3 billion; $8.7 billion). The second phase relates to the East Coast Main Line.

The IEP scheme involves the financing, design, manufacture, delivery, and service and maintenance over a 27.5-year period of a fleet of 122 state-of-the-art trains for the Great Western Main Line and East Coast Main Line. The trains, manufactured by Hitachi Rail Europe, will offer increased capacity and higher service levels than the current fleet. The contract guarantees the availability of the trains to the operating company.

The Agility Trains consortium was awarded the contract for an initial fleet of 92 trains for both the Great Western and East Coast phases in July 2012 at the same time as financial close was reached for the Great Western Main Line (phase one). In July 2013, the DfT submitted a follow-on order for a further 30 trains.

The European Investment Bank is committing £235 million to the IEP scheme, with further financing having been signed off by: Japan Bank for International Cooperation; Bank of Tokyo Mitsubishi UFJ; Development Bank of Japan; HSBC; Lloyds Banking Group; Mitsubishi Trust; Mizuho; Sumitomo Mitsui Banking Corporation; Societe Generale and Credit Agricole.

A statement from John Laing said all work is on schedule and the trains are expected to enter passenger service in 2017 on the Great Western Main Line and 2018 on the East Coast Main Line.