London 'super-sewer' costs water customers less than expected

The Thames Tideway Tunnel will only add around £20 to average Thames Water bills

Updated: 

London 'super-sewer' costs water customers less than expected

London water customers face lower than expected increases to their water bills to fund the capital's £4.2 billion "super-sewer", as the project was today given its formal green light by the regulator.

The Thames Tideway Tunnel will add between £20 and £25 to average bills for Thames Water customers, with work on the 15-mile sewer running beneath the river from West to East London set to start next year and complete in 2023.

Previous estimates had pencilled in a rise of up to £80 a year for the tunnel, which will greatly reduce the 39 million tonnes of untreated sewage that overflows into the Thames in a typical year.

The project is expected to create more than 9,000 direct and indirect jobs at the peak of construction.

Ofwat today handed a licence to Bazalgette Tunnel which will build the scheme for Thames Water's more than five million customers, who currently already pay £7 a year towards the project as part of their bills.

Thames Water chief executive Martin Baggs said strong competition for construction and financing had driven down costs on the project.

Mr Baggs added: "The really good news is that cheaper finance and other efficiencies mean that this hugely important piece of national infrastructure can be built while keeping our bills at or around their current level, before inflation, for at least the next five years."

Environment Secretary Elizabeth Truss added: "Today's announcement brings us one step closer to finally modernising London's ageing sewerage system.

"In the 21st century, the most dynamic city in the world should not have a river that is polluted by sewage every time there is heavy rainfall."

The backers behind Bazalgette Tunnel include insurer Allianz, Amber Infrastructure and Dalmore Capital and investment firm DIF.

Bazalgette Tunnel is named after Sir Joseph Bazalgette, the Victorian engineer behind the transformation of London's sewer system more than 150 years ago.

The companies lined up to build the tunnel include Balfour Beatty's joint venture with Morgan Sindall and BAM Nuttall; Costain's venture with the French engineering groups Vinci and Bachy Soletanche; and Spanish infrastructure firm Ferrovial in partnership with Laing O'Rourke.

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