The Government’s Strategic Rail Authority (SRA) has gone off-panel to appoint Allen & Overy (A&O) to the coveted role of adviser on the Network Rail securitisation and on the interim review of Network Rail ordered by the rail regulator. SRA invited firms to tender for the work because key adviser Linklaters is advising Network Rail on the securitisation.
Linklaters has already advised SRA on £21bn of separate facilities for Network Rail and continues to act for SRA on several major franchises. It advised Network Rail on the acquisition of Railtrack and has used a Chinese wall to continue advising both Network Rail and SRA.
A&O has already had some involvement in the series of complex transactions to sort out the Railtrack affair. Partner Brian Harrison advised the consortium of banks, led by Barclays and UBS Warburg on £9bn of financing for Network Rail.
It is understood that A&O won SRA work against competitors including SRA panel firm Clifford Chance and Denton Wilde Sapte. SRA’s panel firms are understood to include Linklaters, Eversheds and Clifford Chance.
A&O’s new appointment will include advising SRA on Network Rail fundraising; on the securitisation of track access charges; on regualatory issues; contractual and corporate issues; and on the project financing of the network’s infrastructure.
Doug Sutherland, SRA’s managing director of finance and commercial, was recently reported as saying that Network Rail is aiming to raise up to £15bn through a bond issue early in the New Year, helping to reduce the interest charges on the company’s £21bn of debt.
Firms had three weeks to put together their proposals before being interviewed for the work.
Projects and construction partner Nigel Pritchard, who played a key role in A&O’s tender, said: “It was quite a testing beauty parade. We’re genuinely very pleased to get the instruction. This is a separate piece of work where SRA felt that a separate tender process was appropriate. This is quite specialised, rather than involving general franchising matters.” He added: “There is a lot of work going on in the rail industry and we’d like to take advantage of that.”
A&O banking partner Jonathan Bevan is currently on secondment at SRA and will become lead partner for the new client when he returns to the firm in January.