Rotterdam – International investment and advisory firm Babcock & Brown (ASX: BNB) and TowRail BV (TowRail), a Dutch company specialising in the management and operation of rail infrastructure, announced today that BNB has taken a majority shareholding in TowRail. The company will be renamed Babcock & Brown TowRail BV (BNB TowRail).

BNB listed on the Australian Stock Exchange in October 2004 and has a fully diluted market capitalization of 6.2 billion Australian dollar (approximately 3.8 billion euro). BNB
has a highly regarded infrastructure and project finance business operating across a diversified range of sectors, including renewable energy, power, transportation, Public Private Partnerships (PPP) and energy distribution and transmission. BNB started working in the infrastructure sector over 20 years ago, and since that time it has developed a substantial portfolio of infrastructure and project finance assets. As at 30 June 2005 funds and assets under management were more than 6.1 billion dollar.

BNB has a long and successful history in financing rail assets, both as advisor and principal. BNB’s investment in TowRail, positions BNB at the forefront of private sector investors who are seeking to participate in the liberalisation of Europe’s rail sector. From 1 January 2008 Europe will allow the free movement of rail freight traffic across the continent. The liberalisation of the sector is expected to increase significantly the number of rail infrastructure investment opportunities.

TowRail was set up last year TowRail was set up last year by Max van Asch van Wijck, Eric Kemperman and Ton Hayes to bring private sector expertise to the development of the Betuweroute, a dedicated rail freight line connecting the Port of Rotterdam with mainland Europe. BNB TowRail is currently allied with the Port of Rotterdam, the Port of Amsterdam and ProRail in a joint effort to be awarded an initial concession to operate the Betuweroute, prior to the implementation of long term operating arrangements.

A decision by the Dutch Government on an operating proposal submitted to the Minister by BNB TowRail, the Port of Rotterdam, the Port of Amsterdam and Prorail is expected within the next few weeks, following a discussion between the Dutch Government and Parliament on the 28th of September 2005.

“BNB TowRail is confident it can add value”. Mr Max van Asch van Wijck, Chief Executive Officer of BNB TowRail, said “Our integrated logistics chain approach will increase flexibility and control both around the Port of Rotterdam and on the Betuweroute itself, thereby providing the level of service needed to integrate rail solutions into tomorrow’s complex logistics demands”.

In addition, BNB TowRail will position itself to develop and exploit port opportunities, where there is a significant rail-infrastructure component involved, and the management and commercial operation of other railway lines in Europe.

About Babcock & Brown
Babcock & Brown is a global investment and advisory firm with longstanding capabilities in structured finance and the creation, syndication and management of asset and cash flow-based investments. Babcock & Brown was founded in 1977 and is listed on the Australian Stock Exchange. Babcock & Brown operates from 18 offices across Australia, the United States, Europe, Asia and Africa and has in excess of 550 employees worldwide. Babcock & Brown has five operating divisions including real estate, infrastructure and project finance, operating leasing, structured finance and corporate finance. The company has established a funds management platform across the
operating divisions that have resulted in the establishment of a number of focused investment vehicles in areas including real estate and infrastructure. For further information please see our website: www.babcockbrown.com

About Babcock & Brown TowRail
TowRail was founded in 2004 from the idea that a holistic approach towards the rail freight industry could improve efficiency and effectiveness. This vision has been written down in a business plan that challenged the existing business models of rail asset management. The initiators offered their plan to the Ministry, who was in the process of granting the concession on the Betuweroute for 3 to 5 years to Port of Rotterdam NV and ProRail. TowRail was offered an opportunity to contribute its business model and
innovative approach. This all resulted in a joint proposal to the ministry that shows significant improvements compared to the original plan to exploit and maintain the Betuweroute. The Babcock & Brown TowRail management board consists of Max van Asch van Wijck, Eric Kemperman, Ton Hayes and David Humphrey. The supervisory
board consists of Tim Duncan, Jan Andreae and Zeger van Asch van Wijck.