Thames Water has announced a new £4.2bn 'super sewer' is to be developed in London next year.

Construction of the sewer will begin following the confirmation of independent investors to finance and deliver the scheme.

Bazalgette Tunnel, a new special-purpose company appointed to take the project forward, today 24 August received its licence from Ofwat as a new regulated utilities business, separate from Thames Water.

Thames Water has also announced a much lower than predicted cost of the project to customers.

The company's current average household bill for water and wastewater of around £370 per year is now expected to remain at this level, before inflation, until at least 2020.

The 25km Thames Tideway Tunnel will stem the flows from the 34 'combined sewer overflows' (CSO's) identified by the Environment Agency as the most polluting.


The £4.2bn project will connect the Lee Tunnel, a project developed by Thames Water to take wastewater otherwise destined for the Thames to Beckton sewage works in East London.

The Lee Tunnel will be in operation from early 2016.

Along with Thames Water's recent expansion of the five sewage treatment works on the tidal Thames, the two tunnels will greatly reduce the 39 million tonnes of untreated sewage that currently overflow into the tidal River Thames via CSOs in an average year.

Martin Baggs, CEO of Thames Water, said: "Our current annual bills already include £7 for the tunnel and this will eventually rise to a total of £20 to £25, before inflation. This is sharply down from the original maximum estimate of £70 to £80 set four years ago. 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."

Andy Mitchell, CEO at 'Tideway', the delivery organisation for the Thames Tideway Tunnel, added: "Our task over the next seven years is quite simply to make sure London has a sewerage system capable of meeting the capital's modern-day needs.

"Everyone in the team is excited and can't wait to get started."

Bazalgette Tunnel is backed by pension funds and other long-term investors represented by Allianz, Amber Infrastructure Group, Dalmore Capital Limited and DIF.

The investor group includes a significant proportion of UK pension funds through which over 1.7 million UK pensioners will have an indirect investment in Tideway.

(LM)