Another step forward for "super-sewer" as Balfour Beatty clinches building £416m contract and Tideway pension consortium wins rights to own it

Emma Haslett
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The £4.2bn super-sewer has sparked controversy in the capital (Source: Getty)

A bit of good news for troubled builder Balfour Beatty, which this morning announced it had been awarded a £416m contract to build the £4.2bn giant Thames Tideway Tunnel, aka the controversial "super-sewer", as the tunnel's new owners slashed costs on the project.

The company said its joint venture with Morgan Sindall and BAM Nutall will construct the six kilometre-long western section of the tunnel, which will stretch for 25km from Acton to Wandsworth. Construction on that section is due to begin next year, with completion scheduled for 2022.

The company has form when it comes to the construction of large tunnels under London: it's been heavily involved in the building of Crossrail at Liverpool Street.

Balfour Beatty wasn't the only one celebrating this morning: Tideway, a consortium of pension funds and investors including Allianz, Amber Infrastructure Group, Dalmore Capital and DIF, said it had been awarded the licence to own and finance the sewer by water regulator Ofwat.

The consortium has pledged to invest £1.275bn into the scheme - and boasted that thanks to an "innovative" procurement method and low interest rates, it has created "significant cost savings for the project".

But the project is not without controversies. In July former Ofwat boss Sir Ian Byatt branded the scheme a "real disaster".

"My big objection is it's not necessary, and whatever the final cost to consumers, it is unbearably large. If you're thinking about improving people's standard of living, this isn't the way to do it," he told the FT.

Once it's completed, the tunnel is expected to treat 39m tonnes of untreated sewage a year, which is currently discharged into the River Thames, connecting 34 existing overflows along the 25km stretch.

Having declared the Thames "biologically extinct" 50 years ago, last week the Zoological Society of London reported that the Thames was coming back to life, with 2,732 sightings of marine mammals in the past 10 years.

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