Rolling stock

26.03.19

TfL agrees £1bn sale and leaseback of new Crossrail trains to rail consortium

TfL has completed a £1bn deal to sell and lease back new Crossrail-bound Class 345 trains, releasing the capital to reinvest into London’s transport network.

The trains will be sold to the 345 Rail Leasing Consortium under a 20-year ‘sale and leaseback’ deal, releasing approximately £1bn to TfL.

The consortium consists of NatWest, Equitix Investment Management, and SMBC Leasing and the deal includes an option to re-purchase the fleet at the end of the initial lease term.

The contract to supply, deliver and maintain 65 new Class 345 trains through a depot at Old Oak Common for the Elizabeth Line was awarded to Bombardier in 2014.

TfL said the deal with the consortium cost less than assumed in its five-year business plan, and that the £1bn of capital released will be reinvested in transport infrastructure across London, including the delivery of a new fleet of trains for the Piccadilly Line in 2023.

Simon Kilonback, chief financial officer at TfL, said: “This will help us purchase new trains on London Underground's Piccadilly line, where there is a clear need for a modern fleet.

“This is a positive deal for London, releasing almost a billion pounds of funding for TfL which can be immediately reinvested into delivering transport improvements, while still allowing us to operate these trains on our network.

“We look forward to working with the 345 Rail Leasing consortium as we progress towards delivering the Elizabeth line, which once open will support the capital's growing economy.”

TfL stressed that rolling stock leasing is standard practice in the rail industry, and rolling stock leasing companies own the vast majority of the UK’s rail fleet.

TfL has made similar deals in the past, leasing out its new trains for the London Overground since it began running services in 2007 – but leasing options are not currently suitable for procuring new rolling stock on the London Underground due to their “unique nature.”

Andrew Blincoe, head of structured finance at NatWest called it a “great deal for London” and said NatWest was “delighted” to be able to support it.

He commented: “To be able to back an infrastructure project of this nature is very exciting and we are looking forward to seeing the benefits of the new service being delivered in the near future.”

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