Thames 'super sewer' to triple profit, says report
The £4.1B Thames Tideway Tunnel may generate profit that is triple the industry average, according to researcher Bloomberg New Energy Finance (BNEF). The company said that Thames Water's proposal to pay for the "super sewer" by increasing household wastewater charges by as much as £80 a year may generate after-tax returns on equity as high as 24%.
The report comes days after regulator Ofwat rejected Thames Water's request to raise bills 8% a year.
Thames Water said the 25km tunnel, which is currently going through the planning process, is crucial to upgrade a Victorian-era system that strains to cope with London sewage, sometimes sending raw effluent into the waterway.
BNEF said that under the super sewer plan a special purpose vehicle, whose likely investors would be wealth and infrastructure funds as well as Thames Water and its shareholders, would be created that would receive any profits.
The report said there may be other options besides an expensive tunnel, adding that there has been no in-depth study of cheaper alternatives such as managing stormwater at the source and using more efficient technologies.
BNEF chief executive officer Michael Liebreich said: “For the last ten years the Thames Tideway Tunnel has been presented as the only feasible solution to London’s unacceptable sewage overflows. This report shows that this is most likely not the case.”
Liebreich urged a study of such techniques, looking at their use by other cities, “before rushing ahead with an infrastructure project which risks handing an extraordinary windfall to investors at the expense of householders".
- Thames Tideway Tunnel MEICA work up for grabs Thames Water is now seeking tenders for mechanical, electrical, instrumentation, controls and automation (MEICA) work on... Read More >
- Outstanding debt from unpaid water bills rises to £2.2bn Ofwat is urging water companies in England and Wales to do more to prevent unpaid water bills and help customers... Read More >
- Thames proposes 11% rise in customer bills to fund Tideway Tunnel Thames Water is seeking an 11% increase in customer water bills between 2015 and 2020 to help pay for the proposed Thames... Read More >
- Hot stuff: making the most of sewer heat Technology now allows heat from sewage to be extracted and utilised. But what is the true potential of the innovation?... Read More >
- Vacuum sewerage networks: solutions for difficult situations When gravity sewers are unsuitable, vacuum sewerage technology can provide the answers - and with multiple added benefits Read More >
- Pipe liner does the trick for mending rising main A trenchless solution was found for a rising main sewer in Norfolk which had suffered from repeated bursts Read More >
- Rise of the 'wipe wash' clogs UK's drains and sewers A trend for using wet wipes to clean the body could be partly responsible for the repeated blockages which are the scourge... Read More >
- Private drains and sewers transfer - six years on October 2011 marked a major change in the way sewers and drains running from private properties into the public sewer... Read More >