PRESS RELEASE - FOR IMMEDIATE RELEASE 6TH MAY 2016

CAMPAIGN GROUP SLAMS THAMES WATER TUNNEL
CALLS ON GOVERNMENT AND COMPANY TO ABANDON “USELESS PROJECT”

Today, the Thames Blue Green Economy campaign group (Note 1) publishes a devastating critique of Thames Water’s Thames Tideway Tunnel (TTT), and calls on the Government and Thames Water to halt preliminary works and to set up an Inquiry into the suspect financing and institutional arrangements behind the project.

The report, ‘The Case Against the Thames Tideway Tunnel’, sets out detailed evidence against the TTT on the following grounds:

- The TTT is not needed to maintain Tideway water quality in line with European legal standards (pages 5-7)

- The TTT is hugely expensive, with construction costs alone estimated at £4.2 billion (2011 prices) and there are much cheaper and more effective alternatives to cope with occasional run-off issues (pages 7-8)

- The costs of the TTT will be paid for by a new utility charge on the bills of customers across the whole of Thames Water’s region even though the Tunnel will only cope with occasional storm run-off from Inner London (pages 8-10).  Over the last 5 years, Thames Water has paid no UK corporation tax.  Since 2004, Thames Water has paid over £3 billion in dividends to shareholders.

- The problems of the Tunnel are so serious that bidding for the special-purpose TTT “IP”, the company, now known as Bazalgette Tunnel or Tideway, set up to actually build and operate the Tunnel for Thames Water, under license from the regulator Ofwat, is “uncompetitive” under government regulations with only two bidders; therefore breaching normal competitive tendering standards for public service contracts.  HM Government is having to provide guarantees to investors and lenders in an attempt to get the funding committed and the Tunnel built (pages 10-13)

- Thames Water, the Tunnel developer, is owned and controlled by shareholders in a tax-haven (Luxembourg), including a Macquarie European Infrastructure Fund (majority), BT Pension Fund, and the Abu Dhabi and Chinese Sovereign Wealth Funds.  These shareholders have also allowed Tames Water to raise £5 billion of the company’s £10 billion debt via a Cayman Islands company, TWU Cayman Finance Limited. Given the extraordinary secrecy surrounding such tax havens, there is no way of knowing whether this money has come from drug-money laundering, terrorist or other criminal sources (pages 13-14)

TBGE comments:


Lord Berkeley, a long-time opponent of the Thames Tideway Tunnel, said: 
“There is no need for the Government to allow this project to continue.  It will cause some 12 million customers and their grandchildren having to pay for something that is no longer necessary, just to line the pockets of dodgy offshore financial institutions and, when these fail, for the taxpayer to pick up the £4 billion bill. “


Martin Blaiklock, infrastructure project financier and ex-City banker, said:

“Good projects make common sense, technically, corporately and financially.  This one does not!  Construction is split between two parties, Thames Water and Bazalgette Tunnel, creating completion, cost and interface risks, for which customers will have to pay yet they cannot control.  Long-term funding is uncommitted, leaving Government and the tax-payer with significant (£bn) contingent liabilities. The corporate/institutional set-up reflects “jobs for the boys”.

£4bn is a lot of money for an asset, which may never be called into use.  A prudent person would use what funds are available on low risk, low cost Blue-Green initiatives, which create more local jobs long-term, then spend the balance of funds on the NHS, or other useful public service assets!

In essence, TTT represents an expression of executive vanity arising from the flawed privatization of an essential public service 25 years ago, which, today, needs to be re-designed to provide effective regulation to protect customers.  

Charles Secrett (TBGE Campaign Advisor) said:

“Thames Water are a disaster for London and Britain.  They use Luxemburg as a tax haven to avoid paying hundreds of millions of pounds in UK corporation tax.  They borrow billions from the notorious Cayman Islands tax haven, long suspected of laundering global drug gang, terrorist and other criminal funds, to build up unsustainable company debt levels and pay their shareholders and executives billions of pounds in fees and dividends.  This outrageous scandal must be stopped, and Londoners and UK taxpayers protected from Thames Water rip-offs”

FOR FURTHER INFORMATION, PLEASE CONTACT:

 

NOTE 1: TBGE is a coalition of experts from the water industry, engineers, academics, politicians and environmentalists who support Integrated Water Resource Management over the needless, hugely expensive Tunnel.

Link to CASE AGAINST THE THAMES TIDEWAY TUNNEL

Link back to TBGE home page