Line-up of top UK firms on board £4.5bn UK rail development deal

A raft of UK law firms including DLA Piper, Ashurst, Shoosmiths and Freshfields Bruckhaus Deringer have advised on a £4.5bn UK rail deal which will see a fleet of new intercity trains built and as many as 900 new jobs created.

DLA Piper took the lead role for Agility Trains – a consortium comprising Hitachi Rail Europe and John Laing Investments – on the contract for the Intercity Express Programme, which was approved this week by the Department for Transport (DfT).

The programme will see Hitachi assemble a fleet of 92 trains to run on the Great Western and East Coast main lines. The fleet will be maintained via a number of newly-built and upgraded maintenance facilities, including a new factory in County Durham, as well as new depots in Swansea, Bristol, west London and Doncaster.

The DfT claims that 730 skilled jobs will be created as a result of the deal, with a further 200 during construction of the Durham factory itself.

The DLA Piper team was led by London projects head Colin Wilson, alongside finance and projects partners Paul Hirst, Kathy Sharp, Nigel Drew and Dimitri Papaefstratiou and Tokyo partner Koji Ishikawa.

Wilson commented: “This hugely significant contract required us to create innovative contract structures to accommodate, for the first time, a PPP structure for the procurement and delivery of rolling stock, as well as ensuring that the long-term funding could be accommodated across a variety of financing arrangements.”

Approximately £2.5bn of the long-term senior debt has been supplied by a consortium of banks advised by a team from Ashurst, including around £1bn from Japanese bank JBIC, which is making its first foray into the European market. Ashurst partner Mark Elsey led the firm’s team alongside partners Nigel Ward, Terry van Poortvliet, Jane Fissenden, Nikhil Markanday and James Coiley.

Elsey said: “It was a very complex process. Banks have been pretty cautious in terms of long-term lending so it was very challenging to bring together. However, despite the negative press, it shows there is still a banking market out there to do well-structured deals.”

Shoosmiths advised Hitachi with a team led by head of rail projects Chris McClure alongside corporate partner Mark Shepherd, property partner Joanne McGuinness and construction partner Simon Wain.

The European Investment Bank, which also provided funding for the project, was advised by Clifford Chance finance partner Gavin Teague, while Freshfields led for the DfT and Simmons & Simmons acted for Network Rail.

In announcing the deal, transport secretary Justine Greening said: “There can be fewer stronger signs that the UK is the best place in which to invest, and from which to develop new markets, than Hitachi’s decision to base its European manufacturing base right here in Britain.”