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Ferrovial Agroman Joint Venture awarded £746 million contract for London "Super Sewer"

Category: General / 24 August 2015

Construction of London’s new £4.2bn ‘super sewer’ will start next year following the confirmation of independent investors to finance and deliver the scheme.

Earlier today, Bazalgette Tunnel Limited, a new special-purpose company appointed to take the project forward, has received its licence from Ofwat as a new regulated utilities business, separate from Thames Water.

The Ferrovial Agroman Laing O’Rourke joint venture will be building the £746 million Central section, the largest stretch of the Tideway project.

This follows the Thames Tideway Tunnel announcement in July that its System Integration contract for the 25km ‘super sewer’ will go to the infrastructure support service provider, Amey, a Ferrovial company.

Environmental groups and river users have joined Ministers and business leaders in celebrating the news – recognising that the Thames Tideway Tunnel is needed urgently to tackle the issue of discharges of untreated sewage into the river and ensure the capital’s sewerage system is fit for the 21st century, as well as creating thousands of jobs and helping to boost the economy.

Andy Mitchell, CEO at ‘Tideway’, the delivery organisation for the Thames Tideway Tunnel, now owned by Bazalgette Tunnel Limited, said: “Our task over the next seven years is quite simply to make sure London has a sewerage system capable of meeting the capital’s modern-day needs. Everyone in the team is excited and can’t wait to get started.

“It’s not just about cleaning up the river, important though that is. Nor is it just about building a tunnel. It’s about making sure we transform the River Thames, making it central to the capital’s wider social and economic well-being. This is a once in a generation opportunity and we are determined to raise the bar in every way, not least the way we treat local communities potentially most directly affected by construction works.

“Through our commitment to remove excavated materials by barge, the opportunity to rejuvenate the river as a transport artery will be a particular focus for us.”

Ignacio Clopes, International Director Area 2, Ferrovial Agroman, said: “Building on Ferrovial Agroman’s success in the market and established relationship with Laing O’Rourke, it is with immense pride that we celebrate the new contract and enthusiasm that we embark on a truly collaborative project delivery that will expand our activity in Europe.”

Mario Mostoles Ferrovial Agroman UK and Ireland Managing Director, said: “We are delighted to be able to contribute to the delivery of long term benefits for London and its people, saving the river from further pollution and improving the areas local to our activities in the process.”

The Tideway Tunnel will stem the flows from the 34 ‘combined sewer overflows’ (CSOs) identified by the Environment Agency as the most polluting. The £4.2 billion project will connect up with the Lee Tunnel. This is already under construction by Thames Water to take wastewater otherwise destined for the river to Beckton sewage works, East London, from early in 2016.

Along with Thames Water’s recent expansion of the five sewage treatment works on the tidal Thames, the two tunnels will greatly reduce the 39 million tonnes of untreated sewage that currently overflow into the tidal River Thames via CSOs in a typical year.

Bazalgette Tunnel Limited is backed by pension funds and other long-term investors represented by Allianz, Amber Infrastructure Group, Dalmore Capital Limited and DIF. The investor group includes a significant proportion of UK pension funds through which over 1.7 million UK pensioners will have an indirect investment in Tideway. The Consortium’s backing fulfils a key component on the HM Treasury’s National Infrastructure Plan, designed to finance the development of UK infrastructure with the support of highly experienced private investors.

The consortium takes its name from Sir Joseph Bazalgette, the pioneering Victorian engineer, who more than 150 years ago transformed the capital, constructing the interceptor sewers to keep sewage out of the River Thames. Still in excellent condition, these remain the backbone of the capital’s sewerage network, but now lack the capacity to cope with the city’s rapidly growing population.

With planning approvals for the 25-kilometre (15-mile) tunnel already secured, the newly-created company can now award the construction contracts for the project. The winning contractors for the three tunnel sections were selected through a separate and highly competitive tender process run by Thames Water:

  • West: Joint venture of BAM Nuttall Ltd, Morgan Sindall Plc and Balfour Beatty Group Limited
  • Central: Joint venture of Ferrovial Agroman and Laing O’Rourke
  • East: Joint venture of Costain Vinci Construction Grands Projects and Bachy Soletanche

The System Integration contract has been awarded to infrastructure support service provider, Amey, which will be responsible for providing process control, communication equipment and software systems for operational, maintenance and reporting across the Thames Tideway Tunnel system.

They will now mobilise their teams to start the work, which is due to take seven years to complete.

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