Thames Tideway report 8% rise in costs but project still on track for 2024

Five years since the project was given the green light, the company building London’s new super sewer has revealed that costs are projected to rise by at least 8% to £3.8bn after completing the “first and most unpredictable phase” of work.

In an update published today, Tideway say 40% of the work is now complete but acknowledge the “time is right” to update the cost estimate which is now £3.8bn compared to £3.52bn (£3.14bn in 2014 prices).

The good news is that there will be no change to the estimated £20-25 annual cost for Thames Water bill-payers, as costs remain well within the original projection for customer charges. The company says it has already raised enough money to complete the project and requires no further funding as a result of this cost revision.  

Furthermore, after building seven new pieces of land in the Thames, including at Chelsea, Blackfriars and Putney, and digging five giant shafts up to 50m deep below London, Tideway believe it is on track to deliver the project on time in 2024.

The size of task that the company faces is huge with construction taking place at 23 sites across the city. A workforce of more than 2,000, including miners from across the world, are now tunnelling underground to create the 25km-long tunnel. The first kilometre from Battersea to Chelsea was completed at the end of March and two other huge tunnelling machines have also started their journeys.

The tunnel, which will run from Acton in west London to Stratford in east London, will extend London’s Victorian sewer system, stopping millions of tonnes of raw sewage polluting the Thames. Andy Mitchell, Tideway’s CEO, has hailed the progress that has been achieved with workers battling against an unforgiving tidal river, train lines and bridges above their heads, and the tube and utility pipes below their feet. 

“As we approach the half way point of construction, the time is right to update our cost estimate,” he said. “The most important thing to say is that there will be no impact on the estimated cost to Thames Water bill payers and to recognise that our teams have done a great job in getting us this far and keeping us on schedule. Every day we get closer to our aim of giving London a cleaner river.”

The update from Tideway points to “changes to construction methodology” for the rise in costs after having to avoid the need to divert a Victorian gas main at Blackfriars - one of its most complex sites. The diversion would have meant a closure of the Embankment to traffic for up to six months.

While at Tideway’s King Edward Memorial Park site in Wapping, teams also found it difficult with unexpected ground conditions which meant they have had to do significant work to reinforce the ground to make it stable for construction, also adding cost.

Tideway will publish its full annual report and accounts in June.