Mitsui & Co, the Tokyo-based trading house, is set to buy a stake in a UK passenger rail franchise from Abellio Transport Group for an undisclosed amount.
The transaction, still subject to regulatory approvals, will see the Greater Anglia rail franchise become a 60/40 joint venture between the two companies. This is the duo’s second partnership, following their joint bid for the West Midlands rail franchise in 2016, along with East Japan Railway Company.
Abellio said Mitsui would be “the best partner” to help it deliver “its ambitious programme to transform the Greater Anglia franchise”.
The Greater Anglia rail service covers the eastern region of England, operating from southern areas around London to regional hubs such as Cambridge and Norwich, with a contract ending in October 2025. The rolling stock used for the service has an average age of 26 years, according to Mitsui. The agreement will see £1.4 billion invested in the franchise over the next nine years, with the introduction of a completely new fleet and a commitment to cut average journey times by 10 percent, Abellio said.
As the subsidiary of Dutch national railway company Nederlandse Spoorwegen, Abellio has been operating the Greater Anglia franchise since February 2012 and re-won the contract last August.
Through the partnership with Abellio, Mitsui seeks to gain knowledge of the UK PPP model and expand its railway business in Britain and other countries. The trading company participated in the São Paulo subway line No 4 project in 2007, its first PPP in the sector of passenger railways. Another more recent deal is its investment in a general cargo rail transport business and passenger railway operation in Brazil in 2014.
In addition to railway activities, Mitsui also has interests in electricity, gas, water and logistics infrastructure. In May 2015, it acquired a 20 percent stake in Westbourne Capital, the Melbourne-based infrastructure debt fund manager.
Mitsui was reportedly seeking buyers for its wholly-owned 106MW Bald Hills wind farm in Victoria last year. The firm’s spokesperson could not be reached for comment at press time.