Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Customers are set to benefit from any underspend on the £4.2 billion Thames Tideway Tunnel, under a consultation issued by Ofwat last week.
The regulator wants customers to get 70 per cent of any underspend on the tunnel, with the rest going to the recently appointed infrastructure provider (IP) Bazalgette Tunnel Limited.
If Bazalgette spends more than planned, customers will have to meet 60 per cent of the additional cost, while the company itself will pay 40 per cent.
Ofwat said this licence condition “keeps financing costs – and therefore ultimately bills – down, while incentivising the IP to deliver on time and below budget”.
In the regulator’s consultation on the licence for the IP, it states the £4.2 billion Thames Tideway Tunnel project is of an “unprecedented scale, size and complexity” and will be the first project to be delivered under a new regulatory framework.
This framework allows for large projects, such as the super sewer, to be delivered by infrastructure providers that are selected by the incumbent undertaker following a competitive procurement, and are regulated by Ofwat under a project licence.
Ofwat also stated that the IP “can be compared to a medium sized water and sewerage company and we see no reason to treat the IP differently from those companies”.
The regulator needs to give the IP a licence to operate because the revenues it generates will be come from customer bills.
The consultation to give Bazalgette Tunnel Limited a project licence closes on 14 August 2015.
Please login or Register to leave a comment.