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Downer EDI secures $45 million locomotives deal with QR

Date: 11/12/2008

Downer EDI Limited (Downer EDI) today announced that its Rail Division has completed lease for nine new GT46Ace locomotives to QR Limited in an initial $45 million, five-year deal.
Chief Executive Officer Downer EDI, Geoff Knox said the contract includes the build and delivery of the locomotives, maintenance, the provision of spare parts and options to extend the lease for an additional five years.

“Our expansion into the locomotive lease market represents an exciting new era for Downer EDI with the opportunity to significantly enhance business in what is already a very strong market for the company,” Mr Knox said.

“This new market also represents further optimisation of our portfolio to meet the growing needs and expectations of our clients. We have already received a number of enquiries from other clients and we anticipate a steady order book for this product.

“Downer EDI Rail is manufacturing the locomotives at our Port Augusta and Cardiff facilities and will provide the operating lease to QR for an initial period of five years through the new wholly-owned leasing vehicle, Locomotive Demand Power Pty Ltd (LDP),” Mr Knox said.

Downer EDI’s Rail Division has work-in-hand of approximately $4.7 billion and is well-placed to take advantage of the many opportunities stemming from the current economic climate with the enhancement of public transport systems high on the agenda of governments throughout Australia.

QR Chief Executive Officer, Lance Hockridge said the lease would provide QR’s intermodal (containerised) business with a competitive advantage in the $1.2 billion a year national general freight market for rail linehaul services.

He said the first of the locomotives would come on line in late December 2008, and with final delivery planned by mid next year, QR would be well positioned to offer a much improved service to customers.

“The leasing agreement is another sign of QR’s sharper customer focus, commitment to the national intermodal market and plans to leverage market growth opportunities,” Mr Hockridge said.