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Railpool to bridge gap between operators and banks

01 Aug 2008

RAILPOOL: The leasing joint venture formally established this month by HSH Nordbank and KfW IPEX-Bank will target locomotives and passenger rolling stock for lease in Germany and other western European countries, according to Christian Forster, Head of Rail & Intermodal at HSH Nordbank.

Forster acknowledged that Railpool is already looking at various transactions in Germany, including sale-and-leaseback opportunities, across the freight, passenger and urban transport sectors as the market continues to liberalise. The two banks hope that within three to five years, Railpool could build a portfolio worth around €500m in new equipment - the banks forecast that western Europe will require €5·6bn in new rolling stock by 2015.

Although an initial asset base is likely to be established via sale-and-leaseback agreements, HSH Nordbank's Michiel Munting, part of the Railpool management team, suggests a speculative order of locomotives could help the operation gain a foothold among open-access freight operators and passenger franchisees. However, an entry into the wagon leasing market has been ruled out to avoid competing with the banks' own customers.

Munting and Forster believe Railpool will bring greater flexibility and simplicity to the leasing market through a 'one stop shop' approach to bring customers and financiers closer together. 'We want the customer to deal with one face for financing arrangements - not only for operating lease agreements and vehicle procurement, but to give them easier access to other financial products, such as fuel hedges,' Munting adds.

Aftermarket care is another priority focus for Railpool. It intends to offer wet leases where the leasing company will assume some of the risk of vehicle maintenance. 'We can learn from the road haulage sector here,' Munting says. A network of Railpool-approved maintenance depots is envisaged, which would be contracted to undertake repairs on the customer's rolling stock. 'This would keep the locomotive in operation as much as possible, and avoids any disagreements between the leasing company and operator as to who is responsible for repairs'.

Growth beyond Western Europe is 'dependent on business opportunities', Forster says, but HSH Nordbank is looking closely at the UK as well as at a number of emerging markets such as Turkey and Russia.