Water companies say super-sewer will add £25 a year to Londoners’ bills

The Thames Tideway Tunnel will add between £20 and £25 to the average bill for Thames Water customers as work on the new sewer ramps up in the next decade. Previous estimates had pencilled in a rise of up to £80 a year to fund the 15-mile long tunnelling project.

Thames Water now expects the average bill of £370 to rise in line with inflation until after 2020. According to The Telegraph, each household is already paying £7 a year towards the cost of construction, with between £13 and £18 still to be added to the bill.

“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,” said Andy Mitchell, the chief executive of the Tideway project.

The water regulator Ofwat has today approved a consortium of private sector investors to fund £2.4bn of the construction costs not already covered by Thames Water. The Bazalgette group, which is confirmed after being named preferred investor last month, includes the German insurer Allianz, Amber Infrastucture and Dalmore Capital, using a vehicle to allow British pension funds to invest in infrastructure.

The funders named their company after Sir Jospeh Bazalgette, the Victorian architect of London’s sewer system.

The project is protected by a Government support package, meaning investors would be protected against certain complications, such as the state stepping in to halt construction.

The firms lined up to build the 15-mile tunnels 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 Ferrovial in partnership with Laing O’Rourke.

The project won planning permission last September despite complaints from some quarters that the scheme would deliver poor value for money. Ian Byatt, the former head of Ofwat, warned in 2013 that “prestige projects are unlikely to represent a good use of resources”.

Without an upgrade, London’s creaking Victorian sewer system will continue to pour 39 million tonnes of untreated sewage into the River Thames every year.

Construction is due to start in 2016 and complete in 2023. The tunnels will sit beneath the bed of the River Thames, from Acton in the west to Abbey Mills near Stratford in the east.