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24 August 2015

Laing O’Rourke joint venture awarded £746 million contract for London ‘super sewer’

Construction of London’s new £4.2bn ‘super sewer’ will start next year following the confirmation of independent investors to finance and deliver the scheme.

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

The Ferrovial Agroman Laing O’Rourke joint venture will build the £746 million Central section, the largest stretch of the Tideway project.

Environmental groups and river users have joined Ministers and business leaders in celebrating the news - recognising that the Thames Tideway Tunnel is needed urgently to tackle the issue of discharges of untreated sewage into the river and ensure the capital’s sewerage system is fit for the 21st century, as well as creating thousands of jobs and helping to boost the economy.

Andy Mitchell, CEO at ‘Tideway’, the delivery organisation for the Thames Tideway Tunnel, now owned by Bazalgette Tunnel Limited, said: “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.  

“It’s not just about cleaning up the river, important though that is. Nor is it just about building a tunnel. It’s about making sure we transform the River Thames, making it central to the capital’s wider social and economic well-being. This is a once in a generation opportunity and we are determined to raise the bar in every way, not least the way we treat local communities potentially most directly affected by construction works.

“Through our commitment to remove excavated materials by barge, the opportunity to rejuvenate the river as a transport artery will be a particular focus for us.”

Gary Wells, Laing O’Rourke’s Infrastructure MD, added: “Working together with Ferrovial Agroman with whom we have built a successful partnership, we are delighted to be playing our part in the transformation of the River Thames. Delivering a modern-day sewerage system for London is a major feat of engineering and a task that our teams look forward to embarking on.”

The Tideway Tunnel will stem the flows from the 34 ‘combined sewer overflows’ (CSOs) identified by the Environment Agency as the most polluting.  The £4.2 billion project will connect up with the Lee Tunnel.  This is already under construction by Thames Water to take wastewater otherwise destined for the river to Beckton sewage works, East London, from early in 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 a typical year. 

Bazalgette Tunnel Limited 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. The Consortium’s backing fulfils a key component on the HM Treasury’s National Infrastructure Plan, designed to finance the development of UK infrastructure with the support of highly experienced private investors.

The consortium takes its name from Sir Joseph Bazalgette, the pioneering Victorian engineer, who more than 150 years ago transformed the capital, constructing the interceptor sewers to keep sewage out of the River Thames. Still in excellent condition, these remain the backbone of the capital’s sewerage network, but now lack the capacity to cope with the city’s rapidly growing population.

With planning approvals for the 25-kilometre (15-mile) tunnel already secured, the newly-created company can now award the construction contracts for the project. The winning contractors for the three tunnel sections were selected through a separate and highly competitive tender process run by Thames Water.


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