Contract summary
View a detailed summary of the contract (PDF, 3mb)
For a shorter summary, click on the links below to go to the relevant section.
The contractor
Reliance Rail Pty Limited
Suite 2, Level 9
333 George St
Sydney NSW 2000
www.reliancerail.com.au
Equity investors in Reliance Rail:
- Downer EDI - 49%
- AMP Capital Investors - 25.5%
- ABN AMRO (now RBS Social Infrastructure (Australia) Trust) - 12.75%
- Babcock & Brown (now held by International Public Partnerships) - 12.75%
The project
The finance, design, manufacture and through life support of:
- 78 8-car air-conditioned suburban electric trains plus two spare carriages;
- one fixed and one mobile simulator plus PC based materials for training drivers and guards; and
- a maintenance facility on land at Auburn leased to the contractor by RailCorp.
This is for the purpose of making up to 72 trains available to RailCorp for timetabled service each day until the end of the contract term.
The contractor may provide additional associated services such as vandalism repair and downloading of CCTV images.
The contract
The contract is a suite of agreements rather than a single document.
View a diagram of the contractual matrix (PDF, 327kb)
All the contracts to which RailCorp is a party are published on this website. See Schedule of agreements.
Term of contract
The contract became effective on 7 December 2006.
The term continues for 30 years after the delivery of the tenth-last train (i.e. until about 2043) and may at RailCorp’s option be extended for two further periods each of five years.
Related parties
Payments
The contractor is entitled to receive:
- Milestone payments during the construction phase to a maximum of $48m
- Milestone payments during the delivery phase of $2m per train, payable as each train achieves a specified level of reliability, but not payable before seven trains have been delivered
- Availability payments, being amounts (set availability units) paid for each period that a train is made available in accordance with the terms of the contract, subject to performance adjustments (for service availability and reliability), volume adjustments (based on kilometres in service), interest rate adjustments (for certain interest rate risk borne by RailCorp), and re-basing at 10 year intervals for inflation and foreign exchange movements
- KPI payments to a maximum of $700,000 per month, against the achievement of key performance indicators relating to safety, passenger amenity, reporting and rectification of defects and configuration management
- Payment at agreed rates for any additional associated services
Availability and reliability adjustments
Availability payments are made subject to adjustments for each train which is, by default on the part of the contractor:
- Late into or in service (3 minutes or later)
- Very late into or in service (10 minutes or later)
- Cancelled in service
- Withdrawn or withheld on 24 hours’ notice or less
- Withdrawn or withheld on more than 24 hours’ notice
The adjustments are progressively increased to the steady state level during the 30 months from the introduction of the first train.
Extended poor performance may lead to termination of the contract.
Tolls
The contractor is not entitled to receive any public tolls, usage charges or any share in passenger fare revenue.
Asset transfers
RailCorp will provide a lease to the contractor of the maintenance facility at a nominal rent when construction is complete (forecast 2009). The site, including the maintenance facility to be built on it, reverts to RailCorp at the end of the term.
The trains remain the property of the contractor, who must dispose of them at the end of the contract. However, at its option, RailCorp may acquire some or all of the trains at the end of the contract at no cost.
The simulators become the property of RailCorp on the date of practical completion.
Risk transfer
The contractor takes financing risk, design risk, manufacturing risk, performance risk, and the risk of damage to the trains while at the maintenance facility.
RailCorp retains demand risk and the risk of damage being caused to the trains on the RailCorp network.
Additional trains
RailCorp may, at any time up to 18 months prior to the anticipated date of final completion of the last train, require the contractor to negotiate in good faith for the manufacture, through life support and financing of up to 20 additional trains and additional simulators.
Millennium trains
RailCorp may require the contractor to negotiate in good faith for the provision of maintenance and other through life support services at the maintenance facility in respect of the Millennium trains, which are presently maintained at Eveleigh by EDI Rail. (Downer-EDI Ltd, the parent company of EDI Rail, holds 49% of the equity in the contractor.)
Guarantees
The State of New South Wales provides a guarantee under the Public Authorities (Financial Arrangements) Act (NSW) of the obligations of RailCorp to:
- The contractor;
- Permanent Registry Ltd, as security trustee for the debt financing arrangements; and
- Reliance Rail Finance Pty Ltd, the finance company through which the debt financiers provide funds to the contractor