Eight reasons why the Thames Tunnel is a bad deal – for Thames Water customers, for London and for the UK…

January 26th, 2012 | Posted by admin in Why support us

Thames Water claim that their hugely disruptive proposed single ‘supersewer’ deep tunnel scheme is the only cost-effective solution to the sewage pollution into the River Thames.

They justify this claim by asserting that green infrastructure alternatives such as SUDS (Sustainable Urban Drainage Systems) would cost far more.

But actually this is not true. It’s a ‘cost con-trick’ on all Thames Water’s long-suffering customers – especially those who don’t even live in London. Here’s why:

Thames Water are disingenuously comparing green alternatives to the Tunnel against the construction cost of the tunnel and not the end price to consumers. Yet the cost is of course almost irrelevant, since this is merely the amount Thames Water will be paying itself and possibly its contractors to construct the tunnel. What matters is the price…

The construction cost alone already stands at some £4.1 billion for the Thames Tunnel scheme alone (excluding the Lee Tunnel and associated works, for which all Thames Water customers are already paying more). This means that the costs have nearly tripled since the project’s original approval in 2007, and Thames Water have already recently admitted that these present costs are merely “indicative estimates” and are bound to rise still further.

The supersewer’s price to us as consumers (ie all Thames Water bill-paying customers) – that is, what we must pay for cleaning up the Thames this way – is far higher still. This is where the cost con-trick comes in – yet the real price to us is easy to calculate: using the £80 per year extra on their bills for the company’s 5.9m waste water customers (which Defra have confirmed is what it will cost us), this equates to over £472m per year.

This in turn shows that the actual price we will have to pay is therefore actually £13bn in today’s money*. (This is for the Thames Tunnel alone and does not include the Lee Tunnel and waste treatment plant upgrades). So this is the figure which should be compared with the price of green infrastructure alternatives – not the much lower construction cost figure Thames Water have used deliberately to compare ‘apples with pears’ .

In trying to justify the supersewer scheme, the Government’s is conducting its formal “value for money” assessment against the cost not the price. According to Treasury estimates the Government’s cost/benefit analysis shows the scheme to be borderline at best even using this construction cost figure – whereas it is shown to be vastly uneconomic if one uses the correct consumer price figure.

Why should hard-pressed households in London and South-east, who are having to contend with a serious squeeze on their living standards in the middle of a serious economic downturn, have to foot the bill for a huge, unnecessary scheme that even the Government has privately established does not deliver value-for-money for consumers?

The main water consumer watchdog, CCWater, has said that the price of the tunnel scheme amounts to an unjustified ‘tax’ on all Thames Water customers to fund a scheme which the Government is attempting to justify by classifying it of national significance. If so, why are Thames Water’s customers – including all those who live nowhere near London and who will get no direct or indirect benefit whatsoever from the project – going to have to foot the whole bill?

The green infrastructure alternatives to a giant tunnel – which is effectively a 20-mile long cess-pit which will have to be constantly pumped out – have a number of additional benefits which the tunnel does not. This gives them significant added-value, making their end-price compare even more favourably with the supersewer:

Green infrastructure solutions would tackle by far the biggest water-related problem in the South-East – our chronic water shortage. The tunnel does nothing for water conservation at all.

Green infrastructure, of which a major component is water capture and re-cycling, would also reduce the flash floods and the sewage backs-ups in low-lying areas of the London and the South-East. The tunnel will do nothing to address these.

Green infrastructure measures involve green landscaping which would markedly improve the quality of London’s built environment, and beyond across the S-E. By contrast, far from enhancing London’s built environment.

The Tunnel would merely ruin the neighbourhoods of those densely-residential urban sites where the main construction sites are proposed, and blighting the quality of life of the affected local communities for up to 15 years.

Even if the £13 billions of equivalent available funding for a green infrastructure solution alternative were still ‘paid for’ only by Thames Water customers, at least all those customers not only within but outside London would benefit both in water conservation and green landscaping – they would get something worthwhile and lasting for their money.

Whereas this one-dimensional, overblown engineering-led supersewer solution, would only benefit Thames Water, its sub-contractors, and its Australian bank owners MacQuarie Bank.

The arguments from Government (eg DEFRA ) and from other politicians with an axe to grind – such as the Mayor of London – that a major infrastructure project such as the Tunnel will “boost the regional economy” of London and the South-East are completely invalid:

all Thames Water paying customers – nearly 5.9 million – would have to start paying some £80 more per year, for good, from 2013 (some 3 years before construction even starts) out of taxed income.

This would take a huge amount of disposable income and spending power – nearly half-a-billion pounds per year – out of the regional economy at a critical time, and then continuing indefinitely.

This would dwarf any so-called benefit from job creation: even when the construction started in 2016, a large number of the new jobs created – of which there would be no more than 4,000 – would be temporary. In turn most would go to foreign labour and would thus be of no benefit to the regional economy of South-East UK.

There would be no contribution to national GDP either, since the profit on this project would go straight out of the country to the Australian owners of Thames Water.

*This being the NPV (net present value) of the stream of payments bill-payers are making, permanently, once the scheme starts, using an appropriate 3.5% discount rate. NB One should use 100 years as the “horizon” because this is the length of time used by Thames Water in its benefit case.

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One Response

  • Rhamnus says:

    Absolutely agree with the views expressed here. It is not now an issue of ‘not on my backyard’ as I have seen elsewhere, but a problem that needs new solutions, and these must be based on these ‘green infrastructure alternatives’ and the recycling of our waste. If the problem is stop at its root cause (disposing our excrements through flush toilets), we will no only prevent the pollution of our river Thames but also will create the basis for a far more sustainable future for all.

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