G R E G H A N D S M.P .

, C H E L S E A & F U L H A M

HOUSE OF COMMONS LONDON SW1A 0AA
Consultation on Reasons for Specifying the Thames Tideway Tunnel Department for Environment, Food and Rural Affairs Nobel House, Area 3D 17 Smith Square London SW1P 3JR

19th December 2013

RE: Consultations on the Secretary of State specifying the Thames Tideway Tunnel Project as a Specified Infrastructure Project and issuing a Preparatory Work Notice Dear Secretary of State,

At present, the Thames Tideway Tunnel Project is estimated to cost between £4.1 and £4.2 billion (at 2011 prices). The scale and risk associated with the project make it likely that, if it were undertaken by Thames Water, it might jeopardise the company’s ability to provide services to its customers. It is likely that a competitive bidding process for the delivery of the project, through an infrastructure provider, would lead to better value for money for customers than if the project were necessarily delivered by Thames Water.

I am writing in my capacity as Member of Parliament for Chelsea and Fulham, in regard to the proposal to issue a specification notice in regard to the Thames Tideway Tunnel. I note that although no final decision has been taken, you are minded to issue such a notice which would result in the project becoming the subject of a competitive tendering process, rather than be carried out by the incumbent provider, Thames Water Utilities Ltd, by default. I believe this could ultimately minimise the risks of the project and help ensure better value for money for customers.

The specification notice would also deal with how the project is funded, and the tendering process would give rise to an opportunity to explore financing options which minimise the burden on both water rate payers and the taxpayer. At present Thames Water is proceeding on the assumption that it will be responsible for delivering the full £4.2 billion project and is already seeking to recoup this money from water bills. This speculative action is particularly unfair on Thames Water customers given that the company is not guaranteed to be carrying out the full project.

This point was made very clear recently when in December 2013 all UK water companies submitted their business plans for the period 2015-2020 to Ofwat for consideration. All water companies, with the exception of Dee Valley and Thames Water, proposed either a price freeze or cut in bills for the period. In contrast Thames Water has proposed a massive 34.8% increase in the sewerage charge for the period up to 2020, resulting in a 10.4% hike in overall bills, equivalent to £40 per household per year. Thames Water admits that the reason for this increase is specifically to cover the cost of the Thames Tideway Tunnel, and that without the project they would propose a 1% cut in bills instead of a 10.4% rise. This comes on top of a previous attempt by Thames Water from August 2013 to pass

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Carnwath Road would see 24-hour continuous operation for up to seven years, and the disruption faced by local residents, schools and businesses would be enormous. It will also delay redevelopment of the site, leaving a second wave of building work to follow main construction. I do not believe that Thames Water should be allowed to compulsorily purchase land at the Carnwath Road site, especially as this would frustrate the existing re-development plans that Hammersmith and Fulham Council have for the area.

Moreover, as MP for Chelsea and Fulham, I question the need to dig the Tideway Tunnel from Fulham. I am opposed to the use of the Carnwath Road site for the project, and the compulsory purchase of land at the site. Over the last several years, I have participated in two large public summits and numerous meetings with residents’ groups. I can confidently state that the local community is overwhelmingly hostile to using Carnwath Road in this way. Carnwath Road Riverside is in the heart of a residential area, with 15,000 homes and 2,000 businesses located within 2,000 metres of the proposed tunnelling operations. A number of businesses are located on the site itself, and would be lost, with consequences for local employment. Each of the surrounding streets is predominately residential, and there are seven schools and nurseries in the immediate area.

As an MP representing many thousands of Thames Water customers who are concerned about the rising cost of bills, I am sceptical of the passing on of the cost of the project to these customers. I believe that if Thames Water wants to invest in this infrastructure, it should look to do so without further burdening their customers. I therefore welcome the fact that any specification notice would put the financing of the project out to tender, and possibly therefore leading to a better deal for my constituents, and indeed water customers across the whole of the Thames Water area.

on an 8% rise in bills in order to fund land purchases for the Thames Tideway Tunnel. This earlier rise would have meant a rise of £29 per year in the average household bills of local residents. I opposed it in September, and the requested rise was successfully blocked by Ofwat in November.

Although preparatory works at Carnwath Road are earmarked as part of the Department’s current considerations of the project, I am continuing to engage with both Thames Water and local residents as to whether this is the most appropriate side for a main shaft into the Tideway Tunnel. In the event that a specification notice, and an infrastructure provider other than Thames Water is chosen to take over the proposed project, I shall continue to represent the concerns of local residents about the site and look forward to holding a meaningful dialogue about the site and in seeking alternatives.

Greg Hands MP Member of Parliament for Chelsea and Fulham

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