News story

Thames Tideway

GLD lawyers bring light to the end of the tunnel

Sewerage pipes

Sewerage pipes

GLD lawyers based at Defra have guided the successful completion of a £4.3bn contract, which will see the construction of one of the biggest tunnels in the world.

Reaching this milestone brings the government a significant step closer to modernising London’s stretched Victorian sewerage system. The “super sewer” will stop the millions of tonnes of sewage that currently overflow into the Thames each year, protecting the river’s ecosystem and health of those who use the river; and ensuring the UK complies with the European Urban Waste Water Treatment Directive.

Over the past 5 years, Defra Legal Advisers along with the Commercial Law Group and colleagues in Litigation have negotiated a way through many of the obstacles that threatened the project. They have also developed a novel and unique legislative and regulatory framework, which underpins the model that has been used for delivering this infrastructure project, and has reduced the expected cost to Thames Water’s customers significantly.

The £4.3bn project will be one of the biggest tunnels in the world financed and built by the private sector, and one of the first greenfield infrastructure projects that pension funds have invested in. Private investment would not have been secured without the package of contingent government financial support developed by commercial lawyers. This government support package is designed to remove project risks that private sector investors would not have been prepared to take. GLD’s Commercial Law Group partnered with the government’s external commercial lawyers (Freshfields and then Ashurst) in developing the contractual documentation. The Commercial Law Group also played a significant role in securing the necessary state aid approval from the EU Commission.

The Thames Tideway Tunnel has not been without controversy and GLD lawyers, including lawyers at DCLG, steered the development consent process for the Tunnel, despite 4 judicial review challenges brought by organisations opposed to the Tunnel. With expertise from GLD litigators, these challenges were all successfully defended. This outcome was critical to the delivery of the project.

As the construction gets underway, Defra Legal Advisers will continue to advise on reducing the risk of fines being imposed on the UK for failing to comply with the Urban Waste Water Treatment Directive, liaising with Commission officials, and intervene in infractions against other Member States to protect the UK’s position.

Alan Evans, GLD’s Legal Director at Defra, said:

The Thames Tideway Tunnel is many times larger than any previous project in the water sector, with a price tag of more than £4bn and the added complication of digging under the entire length of a major capital city. There is a huge sense of professional pride in knowing that we have been critical in ensuring the go-ahead of this world-leading infrastructure project. A project that will boost economic growth, generate more than 9,000 jobs and bring huge benefits to the natural environment.

It has been a huge team effort over 5 years, drawing on the expertise of many lawyers across GLD, from developing legislation to judicial review litigation and from contract negotiation to planning applications and securing state aid approval. It is a great demonstration of what we can achieve.

The tendering exercise for the project was carried out by Thames Water and, on 24 August, Ofwat awarded a licence to the successful bidder, Bazalgette Tunnel Limited, to finance and deliver the Thames Tideway Tunnel.

Construction of the tunnel will start next year and is expected to take 7 years to complete. It will follow the Thames 25km from Acton in West London to Stratford at depths of up to 65 metres below the River.

Published 9 September 2015