WET News

4 WET NEWS JULY 2014 News+ Infrastructure provider to deliver London's 'super' sewer • Defra rules that a separate IP to deliver the Thames Tideway Tunnel project will ensure value for money T hames Water has been forced to seek competitive bids to deliver and finance the £4.2B Thames Tideway Tun- nel, a•er Defra ruled that the pro- ject will be specified as a Specified Infrastructure Project (SIP) under the Water Industry (Specified In- frastructure Projects) (English Un- dertakers) Regulations 2013. Following a consultation, Defra ruled that the 25km sewer will be financed and delivered by an independent infrastructure provider. It said the competitive procurement of a separate infra- structure provider will help ensure value for money by provid- ing an objective means of testing, whether the financing costs of the project are appropriate and reasonable. If Thames Water was to solely deliver the project, said Defra, then the competitive element for determining and helping drive down the financing costs of the project would be absent. A separate entity that under- takes the project will also isolate NEED TO KNOW Eight joint ventures have been shortlisted for the three contracts – East, Central and West – that are worth £1.6B in total Up to 9,000 jobs are expected to be created by the scheme Construction on the project is due to start in 2015 The Planning Inspectorate completed its examination in March, and a decision is expected in September Professor Chris Binnie, who led a study group recommending that the tunnel be built, believes the tunnel should be scrapped the project risks within that entity. That will both reduce the risk that the costs of delivering Thames Water's other services to custom- ers will increase due to the risk profile of the project, and ensure that any government financial support is focused on the project. While Thames Water will not be able to deliver the tunnel pro- ject, it is allowed to undertake certain preparatory work for the scheme. The Preparatory Work Notice permits or requires Thames Water to undertake certain activi- ties of a preparatory nature in con- nection with the specified infra- structure project. It is expected that the infra- structure provider will be appointed by mid-2015, once regu- lator Ofwat has designated and licensed the successful bidder. Thames Water is already invit- ing international investors to bid to invest about £1B equity in a new utility company, saying it is "a unique opportunity". Mike Gerrard, managing direc- tor of the Thames Tideway Tun- nel, said: "This is a first for the UK, and we've already had a lot of interest from investors who want to be involved in this world-lead- ing project with a vision of provid- ing vital infrastructure for London." David Leam, head of Infra- structure Policy at London First, said he was confident the project would be attractive to foreign and The Right Stock We stock what you need Specialists in Below Ground Drainage for Civils and Utilities At Burdens, we know that our customers need to be able to take for granted that their materials will be on-site and ready to use in line with their project plans. We have to understand their projects, carry a comprehensive range of stock and schedule deliveries to make this happen. FOR MORE INFORMATION VISIT www.burdens.co.uk J13-096 Burdens_adverts for Wet News_265x185_v02.indd 2 25/03/2014 12:13 GOOD MONTH BAD MONTH Bristol Water's planned second reservoir at Cheddar, Somerset, has been given the green light by Sedgemoor District Council. Investment for the £125M, 9,400Ml capacity reservoir now has to be approved by Ofwat. North Midland Construction, parent of NMCNomenca and Nomenca, returned to profit in the first quarter of this year. A first quarter profit of £234K was achieved on revenue down 1.5% to £44.5M. Thames Water will pay £86M in penalties for mis-reporting the number of properties at high risk of sewer flooding between 2005 and 2010. It is committed to a £79M reduction in its regulatory capital value (RCV), and return £7M to customers and the community. Ofwat will 'ruthlessly prioritise' work as it seeks 46 job losses. It has to meet a 30% budget cut. domestic investors: "Investors around the world are flocking to London for secure assets with pre- dictable long term returns – this has already included our tele- comms, energy and water infrastructure. "The Thames Tideway Tunnel is an all-too-rare investment opportunity in brand new infra- structure and seems certain to be the subject of strong global demand." The main works packages for the Thames Tideway Tunnel have been divided into three geograph- ical packages in east, west and central, with the central section offering the biggest tunnelling contract in the UK since Euro Tunnel. The successful bidder for the IP will be announced in early 2015, at the same time the main works contracts are confirmed. The IP will then take on the con- tractual agreements with the con- struction companies with prelimi- nary works beginning in 2016, and tunnelling starting in 2017. "This is a first for the UK, and we've already had a lot of interest from investors..." Mike Gerrard Tunnelling for the project is scheduled to begin in 2017, with preliminary works starting the previous year

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