Railtrack PLC

12 Jul 1999



Simmons & Simmons recently advised Railtrack PLC in connection with long-term arrangements it has entered into with Freightliner Limited relating to Railtrack's infrastructure haulage programme. Contracts were signed on 17 June 1999 only 10 days after receiving initial instructions.

The new arrangements involved two contracts being entered into by Railtrack and Freightliner. The first involves the provision by Freightliner of 15 locomotives for the haulage of equipment and materials by rail which Railtrack requires to enable contractors to carry out works associated with the maintenance, renewal, construction, upgrading, dismantling and removal of the Railtrack network and other networks in which Railtrack has an interest. The second contract is an unregulated track access agreement giving Freightliner permission to have access to the Railtrack network to enable it to provide the haulage services to Railtrack.

The transaction required extensive negotiation of complex charging structures to deal not only with a phased introduction of the locomotives but also to take account of Freightliner's funding arrangements. The contracts also provide for various incentive arrangements including performance regimes.

These new arrangements are an important element of Railtrack's investment programme as the extra capacity provided will facilitate Railtrack's ability to deal with the significant new track access investment that it has committed to as part of its Network Management Statement. In addition it has also created the opportunity for a new entrant into Railtrack's freight haulage supply chain.

The Simmons & Simmons team was led by Commercial partner Juliet Reingold and included Caroline Lueder, Gretchen Kemp and Joel Bentsur (Commercial), Mike Nash (Environment), partner Clare Potter and Chris Mayock (Competition), and Simon Yates (Tax).

Juliet Reingold, partner, Commercial, commented:

"Continuing our role in advising Railtrack on the major re-organisation of its infrastructure supply chain, this deal demanded some creative thinking to implement a complex set of arrangements within a very tight timescale."

ENDS Notes for editors:

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