John Laing increases investment in Denver Eagle rail project

John Laing Group has committed to invest an additional $14m (£10m) to increase its shareholding in the Denver Eagle commuter rail public-private partnership in Colorado to 50% from 45%, it announced on Tuesday.

The FTSE 250 company said its investment in Denver Eagle in 2010 marked its entry into the United States public-private partnership (P3) market, and was the country's first such transit project.

It said the availability-based public-private partnership between the Regional Transportation District (RTD) and Denver Transit Partners added three new commuter rail lines to the region.

Since investing in Denver Eagle, John Laing said it had played an “active role” in the delivery of the project through construction, and entirely into operations in 2019, holding key positions within the project company and at board level, including chief executive officer.

The project's last final completion certificate was awarded in November 2020, formally concluding the construction phase.

John Laing said it had worked “closely” with partners through each phase of the project, and most recently led and secured a refinancing at the end of 2020, resulting in improved cash yields and a gain share with the RTD.

Since operations began, the project had reportedly maintained a “strong” operational track record, with each commuter line averaging 95% or above reliability and a combined ridership of more than 33 million.

Despite the Covid-19 pandemic, Denver Eagle had continued to perform well, and held the highest level of commuter rail ridership retention in the US through the coronavirus crisis.

The project had improved connectivity across the Colorado city, providing links to Denver International Airport and Union Station, with reduced travel times for local, business and tourist commuters.

It had also positively impacted economic growth in the region, with John Laing reporting that during the construction phase alone, it was estimated that it added around $2bn to the local economy.

To date, it had also made more than $31m in contributions to a local small business enterprise community project.

The asset benefits from an availability-based revenue model with a 34-year concession, and its central location in the metropolitan area.

John Laing said the additional investment would enable the company to increase its stake in an existing asset with “considerable opportunities” for further value creation and growth, working with global partners.

It was also an example of how the firm was able to enhance its portfolio, increase control and improve cost efficiency through additional stake acquisitions, the board noted.

“Denver Eagle has shown its resilience throughout the Covid-19 pandemic, with its strong operational performance and high ridership rates,” said John Laing’s co-head of public-private partnerships and greenfield projects, Anthony Phillips.

“This highly attractive asset has proven to be a piece of critical infrastructure for the local communities of Denver.

“We welcome this opportunity to increase our stake in an asset in which we see continued potential value and significant growth opportunities.”

At 0815 BST, shares in John Laing Group were up 0.15% at 400p.