Two private equity heavyweights are competing against each other for a lucrative private finance initiative in Europe's railway sector, where competition is intense at the end of a decade-long investment boom.

3i Infrastructure and Rreef, part Deutsche Bank Asset Management, are competing to provide the equity financing for a £2bn rail deal in the UK. The multi-billion pound project involves the building of new, longer trains, carriages and associated station upgrades on a North-South line in London, on behalf of Thameslink.