Financing for London’s ‘super sewer’ gets go-ahead

London’s waste plumbing system is facing its biggest overhaul since it was first built in the 19th Century – and Londoners will pay for it.

The £4.2bn Thames Tideway Tunnel will be 15 metres (25 km) in length and aims to prevent the 39m tonnes of waste that overflows from our Victorian plumbing system every year.

The project has come under criticism due to its funding structure and lack of competition in the bidding process. However, the Thames Tideway Tunnel’s financing proposals have now been approved, and customers of Thames Water will face a water bill increase of £20-251 per year as a result.

How is it funded?

Thames Water set up a separate company to build and own the tunnel.

  • One-third of the cost will be funded by Thames Water
  • £2.8 billion will be raised by the project company
  • The Government has pledged to act as an insurer, bearing any overrunning costs and covering any incidents during the construction

While customer bills will pay for the sewer, it is being financed and delivered by Bazalgette Tunnel Limited, with the utility to assume ownership once the tunnel is completed in 2023.

Professor Chris Binnie, the former chair of an assessment team that supported the super sewer a decade ago, has said that alternatives should be looked at, as a number of technological advancements since initial talks took place negate the need for such a large-scale project.

He said: “There are a number of ways of reducing [sewage] spill frequency which weren’t sufficiently developed at the time of our original report for us to recommend. Those include local sewer separation between storm water and foul water, real-time control of the sewer system and local detention tanks.”

Construction on the Thames Tideway Tunnel is set to begin next year following the grant of a licence by Ofwat and the confirmation of contracts and investors. It is the second largest infrastructure project in the UK after Crossrail.

1 Financial Times, 2015. Financing for London’s ‘super sewer’ gets go-ahead. [Online] Available at: http://www.ft.com/cms/s/0/e596801c-4a29-11e5-9b5d-89a026fda5c9.html#axzz3joaPo6Jr. [Accessed 25th August 2015].

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