46
infrastructure
investor
may
2014
“An extraordinary amount of effort clearly
went into achieving this transaction.”
“It bears some close similarities to the
Thameslink deal in the UK. Both were
landmark deals in 2013.”
One obvious standout
from the Queensland
New Generation Roll-
ingstock (NGR) trans-
action is its sheer size.
At A$4.4 billion (€3.0
billion; $4.1 billion),
this was the single largest investment
in rail in the state of Queensland. How-
ever, there was far more to the deal
than a headline number.
For one thing, bank funding (pro-
vided by 11 banks) was oversubscribed
by more than two times and featured a
“highly competitive” margin during con-
struction that stepped down during the
five-year construction phase to mirror
the de-risking over the course of the
project – delivering interest cost savings.
Furthermore, the bank group
eschewed the traditional Debt Service
Reserve Account (DSRA) in favour of
a Debt Service Reserve Facility (DSRF)
which provided “substantial” savings
to the concession without adding
any material risks. Macquarie Capital
believes the use of DSRF will likely
become the new market standard,
having freed up around $A30 million
of cash in this case that would have oth-
erwise been trapped in reserves.
Other innovative aspects of the
deal highlighted by Macquarie Capital
in its submission included:
• Structuring which made optimal
use of Government Contribu-
tions, which are milestone-based
during the delivery phase, bring-
ing increased value for money while
ensuring delivery risk remained with
the project company;
• Structuring and modelling that
enabled optimal utilisation of the
milestone-based
contributions and
construction-phase
operational reve-
nue (from the pro-
gressive delivery of
trains) to fund con-
struction costs and minimise the
private financing required;
• The state was provided with the
option of purchasing additional
trains throughmilestone payments
with the additional trains subsumed
into the PPP contract and subject
to the same performance require-
ments at pre-agreed pricing;
• The structuring included mainte-
nance “windows” for a proportion
of the fleet during the day, allowing
the project company to plan main-
tenance activities during off-peak
periods, bringing value for money
benefits.
The project involved the Bombar-
dier NGR consortiumentering an avail-
ability-based public-private partnership
with the state of Queensland for the
delivery of 75 new six-car passenger
trains for the Queensland government
and a new purpose-built maintenance
centre inWulkuraka, Ipswich. Procure-
ment was led by Projects Queensland
in partnership with the Department of
Transport and Main Roads.
The judging panel were impressed
by the effort involved in pulling such
a complex deal together, and also by
the market-leading innovations which
should ensure that the track has now
been cleared for other smoother jour-
neys towards financial close in the
future.
n
An Australian rolling stock deal was not only big,
but also bursting with innovation
On a different track
BANKING AWARDS FOR EXCELLENCE 2013
QUEENSLAND NEW GENERATION ROLLINGSTOCK
Category:
Australia and New Zealand
transport
Winner:
Queensland New Generation
Rollingstock
Nominated by:
Macquarie Capital
(financial adviser to Bombardier NGR
consortium)
Other participants included:
Bombardier
NGR consortium (Bombardier
Transportation, John Laing, ITOCHU
Corporation, Uberior); Allens (legal
adviser to Bombardier NGR consortium);
State of Queensland (Department of
Transport and Main Roads); Projects
Queensland; PWC (financial adviser to
Projects Queensland); Ashurst (legal
adviser to Projects Queensland)
Date of transaction:
20th December 2013
Size of transaction:
A$4.4bn (€3.0 billion;
$4.1 billion - total contract value over
32-year concession)
Honourable mentions in this category:
Queensland New Generation Rolling-
stock was seen to be the clear winner in
this category.
WHAT THE
JUDGES SAID:
