Boris nationalises DLR operators in debt reduction plan

Transport for London is to purchase the companies responsible for the City Airport and Woolwich Arsenal branches of the DLR in a bid to reduce the cost of borrowing.

City Airport Rail Enterprises PLC and Woolwich Arsenal Rail Enterprises operate the routes under Private Finance Initiative (PFI) agreements.

The capital’s travel authority, which is chaired by Mayor of London Boris Johnson, hopes to save up to £250m by refinancing borrowing incurred by the two firms.

In October TfL announced it hoped to to use its AA+ rating to lower the costs of borrowing associated with the nationalised Tube PPP contractor Tube Lines.

Commenting on the DLR deal, TfL’s Howard Smith said: “Now that the extensions have been constructed and are operating successfully we have reassessed the effectiveness of the financing arrangements that sit in the companies behind the projects.

There will be no change to the day to day operation of the DLR, but we have found that we will be able to make ongoing savings by replacing private sector financing costs of these companies with public sector borrowing.

“I’d like to thank the shareholders, Semperian PPP Investment Partners and RBS, who have worked with us to maximise the benefits and the savings we hope to secure.”