‘A boost for east and south London’ as Docklands Light Railway plan secures £300 million investment

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A fleet of 54 new DLR trains are due to be in operation by 2026, which includes 11 additional trains. Photo credit: Creator: Tom Page. Creative Commons Attribution-Share Alike 2.0 Generic license.

The UK Infrastructure Bank has announced a £300 million loan to Transport for London (TfL) to support the Docklands Light Railway (DLR) Rolling Stock Replacement Programme, boosting connectivity, job opportunities and helping to further cut emissions.

The loan is provided through the Bank’s Local Authority function and will finance a significant part of the overall £0.9bn project cost, alongside TfL’s wider financing and a £237.5 million grant from the Department for Levelling Up, Housing and Communities (DLUHC).

UKIB’s loan forms part of TfL’s borrowing requirement for the DLR Rolling Stock Replacement Programme and will be applied to the replacement of ageing trains, some of which have been in use since 1991, as well as infrastructure on the DLR in London. 

Rachel McLean, Chief Finance Officer at Transport for London said:

The replacement of the Docklands Light Railway fleet in east London is a vital project which will deliver a range of benefits to our customers and create increased capacity along the line. 

“This funding from the UK Infrastructure Bank demonstrates further support for the project and allows us to improve upon our previous borrowing strategy by incorporating a long-term loan with rates which offer great value for money, and delivering savings in interest costs across the life of these new trains.”

Rachel McLean, Chief Finance Officer at Transport for London. Photo credit: UK Gov

The programme will provide 54 new trains with enhanced comfort and accessibility, replacing existing DLR rolling stock, and increasing the number of trains. Alongside this, the project is funding further infrastructure improvements such as an advanced signalling system, power upgrades, new sidings, a maintenance shed at the Beckton depot, and minor station upgrades. 

Together these improvements will increase capacity across the network by more than 50 per cent, supporting up to 10,000 new homes and helping to improve access to high quality jobs, as well as help shift more journeys towards a lower-carbon mode of transport. 

In 2019, TfL assessed that this project, through increasing train frequency and capacity, would enable the DLR network to cope with expected increases in passenger journeys from 117 million in 2019 to 240 million by 2040. Use of the DLR has made a strong recovery since the pandemic and therefore the increase in capacity is vital to support the economic growth of east and south London now and in the future.

The trains will serve parts of east and south London some of which are amongst the most deprived areas in the country. Replacing and modernising the fleet allows the DLR to mitigate increasing issues with reliability, which would have potentially led to more journeys by car and other greenhouse-gas-emitting modes of transport. 

Early-stage TfL internal funding and DLUHC grant, combined with TfL’s project delivery experience, has allowed the DLR Rolling Stock Replacement Programme to make rapid progress. Construction of the DLR trains commenced in December 2020, with 22 new DLR trains now built, including two in testing in London across the network ahead of them starting to enter service during 2024. The whole new fleet is targeted to be in place by 2026.

Lorna Pimlott, UK Infrastructure Bank Managing Director, Local Authority Advisory & Lending, said: 

This is a great example of where the Bank should be deploying its capital. It’s a boost for east and south London – increasing capacity on low carbon transport.

“It also gives us a blueprint for supporting other local authorities and mass transit providers on similar schemes across the UK, bringing benefits nationwide. We encourage other cities and regions with ambitious transport schemes to get in touch, so we can explore how we can partner to bring benefits to local communities.”

This is the Bank’s latest activity in the area of local transport. The Bank’s LA function’s advisory service supported West Yorkshire Combined Authority to develop financial and commercial models to deliver a place-centric mass transport system for the region and supported Glasgow City Council to develop financial and commercial plans for the Clyde Metro mass transit project. 

The Bank has previously partnered with the West Midlands Combined Authority to invest £10m in the first phase of its Sprint Bus Route, which provides faster, greener transport between the economic hubs of Birmingham City Centre, Solihull and Birmingham Airport, and is developing a pipeline of zero emission bus advisory and lending projects. 

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