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    Cross London Trains ('XLT')

    Cross London Trains ('XLT')

    Cross London Trains is a company established to procure and lease the rolling stock for use on the Thameslink passenger rail franchise. As part of a wider upgrade of the Thameslink rail network, XLT is investing £1.6 billion in a fleet of new Siemens Desiro City commuter rail carriages to be leased to the Thameslink rail franchise operator.

    Siemens is manufacturing and will deliver the trains over a period of five years, with the first delivery into service in 2016. The fleet will comprise 115 class 700 trains.

    The fleet is maintained by Siemens under a long-term service agreement. Following the initial 20-year period, XLT will retain the ownership of the fleet and will be free to lease the trains for the remainder of their useful life. The Company owns 33.3% of the equity in XLT, in consortium with Siemens Project Ventures GmbH and Innisfree Limited.

    Developments in the year

    The XLT programme aims to deliver 115 class 700 trains by the second half of 2018 to operate across the Thameslink network.

    As at the end of the period, all 115 trains had been manufactured by Siemens and 103 trains had been accepted by the GTR rail franchise. Full acceptance of the remaining units is expected by Summer 2018.

    The performance of the delivered trains continues to improve and remains above the target performance curve.

    Given the advanced stage of the delivery programme, the discount rate used to value this investment was reduced at the end of the year.

    Investment rationale

    The investment has strong infrastructure characteristics and fits well within 3i Infrastructure’s investment mandate as:

    • It is a strategic asset, operating in the capacity-constrained London commuter market;
    • It will generate high quality, low-risk cash flows from lease revenues underpinned by the DfT;
    • It will retain ownership of the trains; and
    • It allows the Company to partner with Siemens, a market leader in the UK rolling stock manufacture and maintenance.
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