Downer welcomes Reliance Rail bailout

6 Feb 2012, 9:22 am   -   Source: AAP
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Downer EDI, the major private partner in the troubled Reliance Rail project, welcomes a restructure of the group's financing.

The major private partner in the troubled Reliance Rail project has welcomed a restructure of the group's financing.

The NSW government has agreed to invest $175 million in 2018 in return for 100 per cent of the equity in Reliance Rail, which is delivering the $3.6 billion Waratah train project.

The troubled consortium consists of engineering firm Downer EDI, Royal Bank of Scotland and interests managed by AMP Capital Investors.

The investment by taxpayers is conditional on the successful delivery of the 78 Waratah trains and Reliance Rail's ability to refinance its existing debt.

Downer chief executive Grant Fenn said the agreement was a positive step for the Waratah train project.

"This agreement will provide Downer and its joint venture partner Hitachi with greater certainty going forward as we manufacture and maintain the Waratah trains," he said in a statement.

"The NSW government has shown its support for this important project and the questions around Reliance Rail funding should now subside.

"The six trains in service are performing well and we expect the seventh train will commence passenger services shortly."

A full update on the Waratah trains project would be provided when Downer reports its half-year financial results on February 21, Mr Fenn said.

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