Thames Water has announced that special-purpose company Bazalgette Tunnel has gained licensing from water regulator Ofwat, which gives the project the green light for construction to start next year.
Following Bazalgette’s licensing as a new regulated utilities business, the preferred bidders for the £4.2bn project announced earlier this year have been officially appointed.
Thames Water has confirmed that the western section of the 25km tunnel will be built by a joint venture of Bam Nuttall, Morgan Sindall and Balfour Beatty, while the central section will be built by Ferrovial Agroman and Laing O’Rourke and the eastern section of Costain, Vinci Construction Grands Projets and Bachy Soletanche.
Thames Water CEO Martin Baggs said: “It’s no exaggeration to say this is a truly momentous day for London and the River Thames. I want to thank everyone who has played a part in getting us this far.
“It’s a historic achievement and I look forward to supporting Bazalgette Tunnel Limited in ensuring the project is delivered safely, on time and to budget. The strong competition for both construction and financing has driven down costs for our more than 5M bill payers.
“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.”