Region: Europe and Central Asia (ECA)
Country: United Kingdom
Sector: Water and Sanitation
Keywords: Knowledge Lab ***, Water
Document Link(s):
Document(s):
- Thames Tideway Tunnel515.87 KB
Document Summary:
The GBP 4.2bn Thames Tideway Tunnel (“TTT”) project, a 25km tunnel to run beneath the River Thames in the centre of London, is the largest sewer improvement project to be conducted in the UK for over a century. TTT will be connected to 34 existing combined sewer overflows running along the River Thames which are owned and operated by existing water utility Thames Water.
Document Details:
PROJECT HIGHLIGHTS
Thames Tideway Tunnel is widely considered to be a landmark project and it has received broad recognition for some of its leading features. Some of the project highlights are considered to be:
• An innovative example of a substantive operating utility business contracting out a significant bolt-on project rather than undertaking the project itself.
• Competitive tender process for cost of capital achieved benefits for customers in an uncertain regulatory environment.
• Funding for the tunnel sourced via an additional charge to Thames Water customers estimated to be approximately GBP 20-25 (down from an initial estimate of approximately GBP 70) annually by the mid-2020s. The annual cost will be determined by the final Regulated Capital Value (“RCV”).
• Parallel procurement processes for construction contracts and the infrastructure provider ultimately linking them together.
• Construction arrangements contain an underspend / overspend arrangement between the three construction consortia, Thames Water, Thames Water sewage users and Tideway.
• Tideway will start generating revenue from day one of construction, coming from Thames Water wastewater customers based on the return from the RCV.
• Not all project debt secured at financial close due to length of construction funding period.
• Mechanism for Financing Cost Adjustment, to provide partial protection against movements in the cost of debt when secured, with some of the cost / saving to be passed on to Thames Water wastewater customers under certain circumstances.
Updated: April 12, 2022