TfL has signed a sale and lease-back deal to sell its fleet of Elizabeth line trains for nearly £1 billion to a consortium comprising Equitix Investment Management, NatWest and SMBC Leasing.
In January 2018, TfL announced that it was looking at whether it could sell and lease back the Elizabeth line rolling stock, to support the delivery for new Piccadilly line trains. Following two rounds of bids throughout 2018, the transaction was approved by TfL’s Finance Committee last December.
The final contracts have now been signed.
Similar leasing deals have previously enabled TfL to introduce new trains onto London Overground since it began running services in November 2007. TfL said that this was why it has pursued the sale and leaseback with the Elizabeth line train fleet, although in both cases, the lease agreements were structured differently from the leaseback deals common to the rest of the national rail network due to the slightly bespoke design of the Overground, and Elizabeth line trains.
Although it’s not normal to sell and leaseback tube trains, the Northern line trains are operated under a PFI agreement signed back in 1995, although that also included a maintenance contract as well.
The final deal also secures TfL savings across its current five-year Business Plan, as the cost of the lease will be less than that assumed in that plan. In addition, the deal includes an option for TfL to purchase the fleet back at the end of the initial lease term if it wishes to do so.
The completion of the sale and leaseback deal will have no impact on the operation or maintenance of the Elizabeth line fleet, which will remain with TfL and MTR Crossrail, who currently operate TfL Rail services.
The aim of the sale is to be able to fund the upfront costs of buying the new Piccadilly line trains, which are due to start arriving in 2023.
So far, 57 of the full fleet of 70 trains for the Elizabeth line have been built.
Crossrail is now carrying out Dynamic Testing of the Elizabeth line through the new tunnels in central London using the Class 345 trains. Test trains have also recently been running out to Reading station as part of TfL’s wider work, along with the DfT, to operate Reading to Paddington services ahead of the completion of the Elizabeth line.