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Acquisition and financing of UK railway rolling stock

Mark Swindell acted for the Southern Region in acquiring and financing of 375 railway rolling stock. Following the British Rail privatisation, this was the first time that trains had been bought for the UK network by a train operator (Veolia). Mark devised the procurement structure and drafted the heads of terms for the transaction, negotiating with the bidders, Adtranz, Siemens and Bombardier. A Joint Venture was created between Veolia and Adtranz (who were bought by Bombardier) with a fixed cost 25 year maintenance deal, which transferred life-cycle risk on maintaining the trains to the private sector. Spare parts could also be purchased at a fixed price.

The deal was innovative in that:

  • It was based around an innovative Joint Venture which allowed the manufacturer to fix the cost of maintenance, and contained options to buy additional trains;
  • It centred around an output-driven specification. The risks of designing and delivering the trains on the network, and working with Network Rail and obtaining their approval, were transferred to the train manufacturers

The structure has survived to the present day.

British Railway Franchises

Mark Swindell advised the British Government and a range of private sector rail companies on developing rail franchises and access agreements under the UK regulations, including structuring access to private finance to support infrastructure and rolling stock upgrade investments as part of long term franchise bids. This included:

  • Acting for the UK government in setting up the contractual framework for the privatisation of Network South Central, an independent train operating company, and East Coast, an intercity train operating company;
  • Acting for a consortium wishing to purchase the rolling stock companies;
  • Working for Stagecoach on various regulatory cases before the regulator relating to the moderation of competition;
  • Advising John Laing on the terms of the 20-year frachise held by Chiltern Railways, and on the sale of Chiltern Railways to Deutsche Bahn; and
  • Acting for Veolia (Connex) on bidding for the first 20-year franchise in the UK for Network South Central, and on the sale of Veolia's interest to GoVia

London Olympics 2012

Mark Swindell acted as a lead advisor on procurement strategy for the construction of the aquatics centre, velodrome and transport infrastructure for the 2012 London Olympic Games with a particular focus on the introduction of the competitive dialogue process to deliver time and cost efficiencies.

UK Medium Support Helicopter Simulator Training Facility

Mark acted for the winning consortium (CAE, Serco and HSBC) in constructing the first privately financed major helicopter simulator training facilities in the UK at RAF Benson. The project had the following characteristics:

  • The MOD set out an output specification and the private sector structured a process and methodology to design and deliver a state of the art facility
  • The payment mechanism was based on the availability of training hours on the simulators
  • The project was used as the base to develop standard arrangements in privately financed transactions around change of law, insurance, liability, force majeure, and compliance with security requirements

Nick English acted as financial advisor alongside Mark in this project

UK Tram/Light Rail Networks

Mark Swindell worked on the South Hants light rail system and the Leeds supertram with the relevant public authorities and Partnerships UK to develop a procurement to procure the private sector partner to take on the tram concession. The bids received from the private sector for taking demand risk exceeded the public authorities' affordability limits and so the schemes were discontinued.

UK Defence Construction Vehicle Support Project

Mark Swindell worked with Amey and Babcocks on developing a “just in time” business model for the provision of construction vehicles to the UK Ministry of Defence. Major issues included:

  • Giving the MoD confidence that vehicles would be available as required; and
  • Structuring a payment mechanism which rewarded the delivery of usable vehicles when required rather than paying for vehicles on a just in case basis

UK Submarine Simulator Training Facility

Mark Swindell worked with CAE, Alenia Marconi and Babcock on developing a project to provide simulator training facilities for the new Astute Class nuclear submarine at Faslane for the UK government. Major issues that had to be overcome included:

  • Interface arrangements with original equipment manufacturers to design and provide intellectual property in relation to a new system
  • Extending the payment mechanism from an availability of simulator hours measurement system to taking payment risk on delivery of trained personnel
  • Innovative subcontractor flowdown arrangements

UK Military Flight Training School

Mark Swindell advised KKR and Bombardier on bidding for this project. He helped to devise an innovative joint venture whereby the private sector was rewarded by reference to the savings that could be generated through acting as an integrator to deliver platforms and training systems for the whole of the military flight training school, throughout the pilot training pipeline.

UK Defence Electrical Field Generators

Mark Swindell worked with the winning Rolls Royce-led consortium. The key issue was the management of the provision of these generators in areas of conflict, including the regulation of provision in and out of theatre and maintenance obligations.

British Embassy in Berlin

Mark Swindell acted as lead advisor to the UK Government on the construction of the Berlin Embassy. This was the UK Foreign and Commonwealth Office’s first private finance project, built by Bilfinger Berger to a pre-existing design. As described in the National Audit Office Report “The New British Embassy in Berlin” (HC 585 Session 99-00), it provided a model for future projects, particularly in its risk-transfer provisions.

London M25 orbital motorway

Mark Swindell and Matthew Allen advised the funders supporting Ferrovial and Laing O’Rourke on their bid for the right to widen and maintain the M25 London orbital motorway. Key issues included the cost of maintenance services, which exceeded the capital cost of widening the road, and defining the availability requirements.

UK Road Maintenance and Street Lighting

Mark Swindell acted as the senior advisor to Birmingham City Council on developing the strategic structure of this innovative major PPP project, and setting up the procurement process. Key issues dealt with included identifying the risks best managed in the private sector, and setting up a payment mechanism which linked to the delivery of defined measurable outputs in connection with maintaining a complex road network including tunnels and street lighting.

UK renewable energy and waste to energy projects

Mark Swindell has acted on a number of major PPP projects in the renewable energy and waste to energy sectors. These include:

  • Acting for a joint venture with the Carbon Trust on the creation of a public sector joint venture, and a bid to put windfarms on public premises;
  • Acting for Wandsworth County Council in relation to the management of the Battersea waste collection facility, structuring the creation of a new waste-to-energy incinerator in Mucking, Essex, and transporting the waste down the Thames;
  • Acting for a significant investor in bespoke ships for the transportation and maintenance of off-shore wind turbines

Taunton Oncology PFI

Matthew Allen acted as a legal advisor to Innisfree, the project’s sponsors, in this groundbreaking transaction that was the first UK healthcare PFI project where medical equipment risk was not ring-fenced. This involved structuring an innovative performance regime for the medical equipment that met the goals of all project stakeholders.

Czech Republic Armoured Vehicles

Mark Swindell advised the Czech Ministry of Defence on a €750 million deal for the acquisition of armoured vehicles from OEM with a long-term PPP maintenance provision 

Mersey Gateway Bridge

Mark Swindell is currently acting as Commercial Director of procurement team responsible for:

  1. Negotiating funding terms with the Department of Transport and seeking clearance through the Treasury Approval Process
  2. Devising an innovative procurement strategy that will deliver the best value for money DBFO crossing as well as allowing the private sector to support the Mersey Gateway Crossings Board to share in future toll revenues in return for an upfront investment
  3. Taking the lead in all commercial, legal and financial negotiations with bidders to bring the project to a successful conclusion

UK Intercity Express Programme

Mark Swindell acted as lead advisor for Agility Trains (Hitachi, John Laing, Barclays Private Equity)  for 3 years from early in the competitive bid phase to the appointment (and re-appointment in March 2011) of this consortium as preferred bidder on this innovative private finance train service provision procurement. This project is currently going through the financing stage and is due to close in early 2012

UK Hereford Hospital

Mark Swindell advised Alfred McAlpine, Atkins and HSBC on one of the first UK general healthcare hospital PPP Projects. This was a ground-breaking project, created prior to the standardisation of UK hospital PPP procurement. In particular, it included innovative sub-contractor flowdown.

Privatisation of UK’s rolling stock leasing companies

Nick English acted as financial advisor to the UK Department of Transport in the privatisation of the UK's rolling stock leasing companies

UK shadow toll road DBFO

Nick English acted as financial advisor to the UK Highways Agency in the Tranche 2 and M40 DBFO schemes

South Hants and Nottingham light rail schemes

Nick English acted as financial advisor to Siemens in the South Hants and Nottingham light rail schemes

Diabolo northern rail infrastructure PPP

Nick English acted as equity investor/sponsor and joint Financial Advisor to the first rail PPP in Belgium