The Departments of Transport and of the Environment are looking for a merchant bank to advise them on Canary Wharf and the proposals for extending and privatising the Docklands Light Railway.
As we reported on November 30, the consortium of Morgan Stanley/Credit Suisse First Boston, which is planning to develop Canary Wharf in the Isle of Dogs, has offered to pay £30m towards the cost of building a spur, linking the development with Bank. It has also agreed to underwrite the privatisation of the DLR if no other private sector taker comes forth.
The merchant bank appointed will advise the two departments on the Government’s interest in the negotiations, which are currently taking place between the consortium, London Regional Transport and the London Docklands Development Corporation.
On the transport side, LRT and the consortium are working out the detailed design and cost of the DLR extension. Plans for privatising all of the DLR system are also being drawn up.
Here, the merchant bank’s job will be to advise the Government on the financial implications of the extension and the arrangements made for the private sector to take over and run the DLR. The Government wants to be sure that the £77m it is investing will be protected.
The merchant bank appointed will be vetting the building agreement which the consortium and the LDDC are currently working out. This will govern the development of Canary Wharf.
The deadline for submissions from merchant banks is January 10, and the Government hopes to make an appointment by the end of the month.
