TfL to sell and lease back Elizabeth line fleet to finance new Deep Tube trains


Transport for London (TfL) has confirmed that it plans to sell and lease back its new Elizabeth line fleet in order to raise the money needed to buy new Piccadilly line trains.

The measure, which is fairly common in the financing of new rolling stock, is being taken to raise £875 million to fund the first fleet of new trains for the Deep Tube network – a programme previously known as New Tube for London.

TfL expects to award the contract in the first half of this year.

During a London Assembly budget committee meeting earlier this month, Simon Kilonback, interim chief finance officer at TfL, said a sale and leaseback arrangement would be used to finance the new Piccadilly line fleet. Although he didn’t confirm which trains TfL had in mind.

In a statement confirming that it will be the Class 345 Aventras, Simon said: “In the UK rail industry the vast majority of trains are owned by rolling stock companies or financial institutions that lease them to train operators. This arrangement is used by almost every rail operator to limit up front costs or to free up new investment for other projects.

“We are looking at whether we could follow this perfectly standard practice approach with the Elizabeth line rolling stock, as we have previously done on London Overground. This would allow us to purchase new trains on London Underground’s Piccadilly line, where there is a clear need for a modern fleet.”

Although TfL has used a leasing strategy for its London Overground Class 378 fleet, it said there were no plans to sell and lease back any of the London Underground fleet.

Nothing new

The practice of selling trains and leasing them back to finance new vehicles has been common since the privatisation of the UK’s rail network.

The process was used by English Welsh & Scottish (EWS) in the 1990s to finance the first Class 66s.

Read more: Why leasing back old trains to buy new isn’t such a strange idea