Fundraising

Partners Group to invest in $1.5bn Victorian trains PPP

The project will deliver a fleet of 65 new trains for Melbourne’s Metro Tunnel, due to open in 2026.

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Partners Group has agreed to invest in Melbourne’s High Capacity Metro Trains PPP as the largest equity investor in the scheme with a 49.9 percent shareholding. 

The Swiss-based firm is leading the Evolution Rail consortium, which includes Australian transport services provider Downer Group, Chinese rolling stock maker CRRC Changchun Railway Vehicles and Sydney-based developer Plenary Group, to deliver the A$2 billion ($1.48 billion; €1.4 billion) PPP. 

The project involves the design and delivery of 65 trains to the state of Victoria, as well as the provision of maintenance services for 30 years. The rolling stock will be delivered by Downer and CRRC, with the first train expected to come into service in mid-2019.   

All of the new trains will be built in Victoria and include more than 60 percent local content, the state government said. They will form a fleet ready for the opening of Metro Tunnel, scheduled for 2026.

Once operational, the project will provide stable “availability-style” revenues to investors, according to Benjamin Haan, managing director and head of private infrastructure for Asia-Pacific at Partners Group. 

The firm’s co-head of private infrastructure Brandon Prater added that the project was backed by the AAA-rated Victoria state, “a great fit” with its investment strategy and complementary to other social and transport infrastructure investments in its portfolio. Partners Group has previously invested in the Victorian Comprehensive Cancer Centre Project. 

The Victorian government announced the Partners Group-led consortium as the preferred bidder for the Metro Trains PPP in September. 

The project is part of the state’s 10-year rolling stock revamp programme, with more than A$3 billion invested in new-built and upgraded train and trams since the beginning of 2015. The government ordered nine new six-car trains from railway developer Alstom while Bombardier in Dandenong are delivering Victoria’s VLocity Regional Trains and Melbourne’s E-Class trams. 

The state is also studying the economic case for Next Generation Regional Train, a major diesel train contract expected to go to the market by 2018 that will call for the delivery of new regional carriages.