The Heathrow Southern Rail (HSR) line project is to give Aecom its first private finance infrastructure deal in the UK.
Aecom chief executive for cities David Barwell says the consulting giant plans to make a “major investment” in the scheme via a design, build, finance and operate (DBFO) model.
The company already invests in such projects in America, but it has yet to venture fully into them in the UK. Although it is working as the design and build contractor on a building in London, this will be its first move into DBFO infrastructure as an investor.
It has now bought shares in project promoter Heathrow Southern Railway Ltd. Aecom’s current role on HSR is to help take the project through its next stages, which includes stakeholder engagement with those communities and organisations affected by the line.
Barwell described the HSR scheme as a “no brainer” and a perfect entry into the market. “It allows you to get in there as the private sector and see how we can do it better,” he says. “That’s a large driver for us.
“We looked at various schemes to do that, and this, well, it’s a no brainer as a scheme. It’s a short length, it provides great access and it does more than just serve Heathrow.”
The new 13km line will link Heathrow airport with Chertsey to the south, following the M25 corridor. From Chertsey, services will run on existing track to Waterloo. There will also be a spur to Staines. It will also give passengers in Surrey an alternative route to Paddington.
At Heathrow, the route to Chertsey will begin in a section of tunnel under Terminal 5 and continue south parallel to the M25.
Barwell says the new terminus could punch through the Terminal 5 underground box housing the Piccadilly line and Crossrail.
The line is expected to open in 2024 and HSR expects to earn revenue from standard track access charging set by regulator the Office of Road and Rail (ORR). The track would be owned by Heathrow Southern Rail Ltd with Aecom as a shareholder.
HSR says the capital cost is estimated to be £1.2bn but Aecom says it is too early to say how much money it will put into the scheme.
“We have made a major investment to take the project to the next stage, this investment is equity and gives us shares in Heathrow Southern Rail Limited.
“It is our intention to remain a shareholder and see the project through to completion,” says the company.
“It’s too early to say how much money Aecom might put in, in the future, as there are number of factors that will need to be considered when the time is right.”
The focus at the moment is working with government to ensure their support and positioning the project for further investment at the best possible terms to take the project forward.”
Aecom’s ongoing role in all of this will depend on how the work is divided up once the HSR concession is awarded. Barwell said there are a number of roles, including shareholder or owner’s engineer, that it could take on.
Reproduced by kind permission of New Civil Engineer