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Strong ‘appetite’ for private investment in Heathrow rail links

rail

There is “significant appetite” from the private sector to invest in Heathrow rail links from the south and west, according to the government’s market sounding reports.

A decision on which rail schemes to Heathrow will be taken forward has yet to be announced, following the Department for Transport’s (DfT) call for ideas.

Earlier this month, New Civil Engineer revealed that two schemes – the Windsor Link Railway and HS4Air connecting Heathrow and Gatwick to HS2 – had been thrown out.

The Department for Transport (DfT) Southern Rail Link to Heathrow (SRLtH) Market Sounding report concludes that “there appears to be significant appetite from private sector promoters to develop and deliver SRLtH”.

The report adds that “there is private sector appetite for being involved earlier in the development process”, with 27 organisations submitted detailed views on the rail link.

Similarly, the marketing sounding report into a western rail link to Heathrow (WRLtH) concludes that “there is currently sufficient market appetite and financing capacity for the proposed privately-financed element of the WRLtH project”.

The report adds: “Equity providers, debt providers and European (nonUK) contractors all indicated significant interest in the project as an availability-based PPP project.

“UK contractors, for the most part, were interested in the project from a contracting viewpoint but were less enthusiastic in their support for the proposed PPP option in light of the risks which might be expected to pass to them as part of a bidding consortium.”

The market report also identified splitting the project into two packages as favourable.

“The proposed approach of splitting the project into two packages was felt to be a sensible option, with Package B (interface to Great Western Main Line) being delivered by Network Rail and Package A (tunnel and associated works, and interface to Heathrow) by the successful bidder via a Special Purpose Vehicle (SPV),” the report adds.

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