Transport: High Speed Rail in the UK

What is a high speed rail model?

A financial model that is used for the operations of high speed rail franchise infrastructure such as track and stations.

Modelling for high speed rail infrastructure requires both a short-term operational study and a long-term strategic analysis.

So there are two models:

  1. Short-term operational model
  2. Strategic long-term operational model

If these models are used together then they require a common interface.   Moreover, they are defined by six common characteristics:

  • 13 rail periods per year (rather than months)
  • Paths, tariffs and discounts per model period
  • Revenues and charges in the form of:
    • Investment Recovery Charge (IRC)
    • Traction Electricity Charge
    • Operations Maintenance and Renewal Charge (OMRC)
    • Other charges such as the Capacity Reservation Charge
    • Other income from stations including car parking and retail rental
  • Highly structured long-term financing
  • Macro-economic indexation to underpin revenues and operating costs
  • Long-term time horizons (for example 25-years plus)
  • Requirement of highly flexible sensitivity analysis

Given these six defining characteristics these models can become large and complex.

Who are these models for?

Our high speed rail models are for demanding, commercial-focused investors and directors.  

They want to better understand the dynamics of their business, and gain an intuitive feeling for the key drivers of their business.

They require elegant and pragmatic solutions that simply give them the information they need, without wasting time.

They require the reassurance of proven technology and track record for the demanding commercial world in which they work.

Features

  • Our high speed rail models are fast and don’t require macros
  • Modular build allowing change over time
  • Transparent and simple modelling
  • Can comfortably deal with very large revenue and cost calculations
  • Super-organised and structured
  • Excellent sensitivity analysis, results storage and comparison
  • Built in FAST standardised modelling language
  • Proven track record
  • Bankable models, they can be used to source investment or finance

Benefits

What are the key benefits?

  • Fast analysis for intuitive business understanding
  • Better commercial structuring
  • Better deal-driver understanding
  • Quicker analysis with clear and transparent organisation
  • Investor reassurance with bankable models
  • Reassurance from proven track record

Objections

We don’t doubt that the savvy financier has questions, so we try to answer these.

What is the cost of a high speed rail model?

Our models contain part-template and part bespoke elements so are very well priced.

Are these models reusable?

Yes, for the most part they are.   We can explain this in more detail.

Will the model allow me to find the most optimised solutions?

Yes, one of the key strengths of our models is the organised and well-structured commercially correct cash flow waterfall.

Will the potential investors doubt the model?

No, our models are bankable.   More than that, we like to think they are at the very top of what investors and lenders will have seen.

Get in touch to find out more

 

 

 
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