A project licence was awarded to Bazalgette Tunnel Limited on 24 August 2015 by Ofwat to design, build, finance, operate and maintain the Thames Tideway Tunnel.
To help the private sector to finance this project at an appropriate price for customers, the Secretary of State for Environment, Food and Rural Affairs signed a series of contracts with Bazalgette Tunnel Limited. These commit the Secretary of State to provide contingent financial support, in certain specified circumstances, whilst the project is being built.
In addition the Secretary of State, Thames Water Utilities Limited, and Bazalgette Tunnel Limited signed an agreement which establishes a liaison committee to oversee the project’s progress.
All of these are long, detailed, technical legal contract documents.
Government support package
The government support package consists of six core contract documents designed to support the Tunnel project should exceptional, highly unlikely risks happen, which the private sector could not cover at an acceptable cost, or at all. The six core contract documents are:
- supplemental compensation agreement
- market disruption facility
- contingent equity support agreement
- discontinuation agreement
- special administration offer agreement
- shareholders direct agreement
The liaison committee will oversee the project’s progress. It will consist of representatives from the government (Defra), Thames Water Utilities Limited, and Bazalgette Tunnel Limited. The water industry regulator, Ofwat, and the Environment Agency, will be able to attend as observers. An independent technical adviser will report on the engineering aspects of the construction.