CMS Cameron McKenna has advised the Metronet consortium on the successful transfer earlier today by London Underground to Metronet of two of the three infrastructure companies ('Infracos'), completing the final stage of the London Underground PPP.
The two Infracos are BCV (comprising the Bakerloo, Central, Victoria and Waterloo and City lines) and Sub-Surface 'SSL' (consisting of the District, Circle, Metropolitan, Hammersmith & City and East London lines). The third Infraco, JNP, comprising the Jubilee, Northern and Piccadilly lines was transferred to the Tube Lines consortium on 31 December 2002.
The LUL-PPP is the largest and most complex PFI/PPP carried out in Europe to date. It provides for operational control of the tube network to remain with LUL in the public sector, whilst the Infracos take responsibility for maintaining, renovating and upgrading the infrastructure – rolling stock, signalling, track, stations, tunnels, bridges, etc.
In addition to agreeing the terms for the acquisition of the two Infracos, Metronet has, over the last four years:
- agreed the detailed terms of the Service Contracts and related technical and other arrangements that are in place between the Infracos and LUL
- undertaken a massive due diligence exercise
- procured a new set of insurance arrangements
- negotiated supply chain contracts for the provision of stations, civils, track and rolling stock and signalling works
- participated in two sets of judicial review proceedings
- raised approximately £3 billion of new financing, including £1 billion raised by way of bank debt from a syndicate of banks led by CIBC, Deutsche Bank and The Royal Bank of Scotland, £600 million of facilities from the European Investment Bank and £1 billion in aggregate of Fixed Rate and Index Linked bonds which are listed in London. The joint lead managers of the bonds issues were Deutsche Bank, UBS Warburg and The Royal Bank of Scotland and the bonds were "wrapped" by AMBAC and FSA, the monoline insurers.
The Metronet consortium consists of Balfour Beatty, Bombardier, Seeboard, Thames Water and WS Atkins.
Andrew Ivison said, "Given all the various challenges involved, it is only as a result of great teamwork and perseverance among all the clients, lawyers and other advisers that two superb projects, which in due course will really make a difference to the London Underground and the travelling public, have finally been delivered. I suspect that there is unlikely to be another project encompassing such a wide range of legal, commercial, technical and political issues for some time.
I would like to pay thanks to all the different law firms involved for their unceasing efforts on all stages of the projects, not least over the last few months, in ensuring that the 1,000 plus documents involved were all in the right place and authorized and signed by the right people at the right time, but particularly to my own team for their phenomenal commitment, good humor and unstinting support."
For further information please contact:
CMS Cameron McKenna
Andrew Ivison, Partner
+44 (0)20 7367 3000
Samantha Beams, PR Manager
+44 (0)20 7367 2899
Metronet
Roger Shire, Media Relations Manager
+44 (0)7801 296172
