x Abu Dhabi, UAESunday 23 July 2017

ADIA is on board for British rail bid

The Abu Dhabi Investment Authority is a member of a consortium looking to buy the British high-speed Channel Tunnel rail link.

UBS has set an August 17 deadline for offers. Eurotunnel has joined with Goldman Sachs and Infracapital to compete for the rail.
UBS has set an August 17 deadline for offers. Eurotunnel has joined with Goldman Sachs and Infracapital to compete for the rail.

The Abu Dhabi Investment Authority (ADIA) is a member of a consortium looking to buy the British high-speed Channel Tunnel rail link, it emerged yesterday. According to reports in the UK media, ADIA has joined forces with British infrastructure investment funds to take part in the auction of High Speed 1, which owns the railway stations and track connecting London with the Channel Tunnel to France.

The project has been earmarked for privatisation by successive UK governments and was recently confirmed for sale by the UK's coalition administration. The price tag is reported to be between £1.5 billion (Dh8.64bn) and £2bn. ADIA declined to comment on the report, but a source close to the sale process in London confirmed the Abu Dhabi sovereign wealth fund was involved in one of the consortiums interested in High Speed 1. ADIA's involvement is said to be "at a very early stage".

Its partners in the consortium are believed to be 3i, the British private equity group, and Morgan Stanley, the Wall Street investment bank. In what insiders call a "very competitive process", the ADIA consortium will face opposition from Eurotunnel, the company that operates the tunnel itself. Eurotunnel has joined with the US investment bank Goldman Sachs and Infracapital, an infrastructure fund.

"There has been wide interest from around the world. This is a good time to be selling infrastructure assets as there are not a lot of large projects completed and for sale," said the person familiar with the sale process. The track, which links St Pancras station in London to the Channel Tunnel entrance at Folkestone, took nine years to build and was opened in 2007. It was the first new rail line in the UK for more than a century.

Potential bidders in the auction, which is being run by the Swiss bank UBS, have completed a pre-qualification questionnaire. UBS hopes to have all bids in ahead of a deadline of August 17, and to be able to announce a preferred bidder by the autumn. High Speed 1 is owned by its constructor, London & Continental Railways, which is itself owned 100 per cent by the British government. ADIA's interest in infrastructure assets was underlined earlier this year with the purchase of a 15 per cent stake in London's Gatwick Airport. It was also a bidder in the recent auction of UK electricity interests sold to businesses of the Hong Kong tycoon Li Ka-shing.

fkane@thenational.ae