GREG HANDS M.P., CHELSEA & FULHAM

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HOUSE OF COMMONSLONDON SW1A 0AA

Consultation on Reasons for Specifying the Thames Tideway TunnelDepartment for Environment, Food and Rural AffairsNobel House, Area 3D17 Smith SquareLondon SW1P 3JR

19th December 2013

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

Dear Secretary of State,

I am writing in my capacity as Member of Parliament for Chelsea and Fulham, in regard to theproposal to issue a specification notice in regard to the Thames Tideway Tunnel. I note that althoughno final decision has been taken, you are minded to issue such a notice which would result in theproject becoming the subject of a competitive tendering process, rather than be carried out by theincumbent provider, Thames Water Utilities Ltd, by default. I believe this could ultimately minimise therisks of the project and help ensure better value for money for customers.

At present, the Thames Tideway Tunnel Project is estimated to cost between £4.1 and £4.2 billion (at2011 prices). The scale and risk associated with the project make it likely that, if it were undertakenby Thames Water, it might jeopardise the company’s ability to provide services to its customers. It islikely that a competitive bidding process for the delivery of the project, through an infrastructureprovider, would lead to better value for money for customers than if the project were necessarilydelivered by Thames Water.

The specification notice would also deal with how the project is funded, and the tendering processwould give rise to an opportunity to explore financing options which minimise the burden on bothwater rate payers and the taxpayer. At present Thames Water is proceeding on the assumption thatit will be responsible for delivering the full £4.2 billion project and is already seeking to recoup thismoney from water bills. This speculative action is particularly unfair on Thames Water customersgiven 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 submittedtheir business plans for the period 2015-2020 to Ofwat for consideration. All water companies, withthe exception of Dee Valley and Thames Water, proposed either a price freeze or cut in bills for theperiod. In contrast Thames Water has proposed a massive 34.8% increase in the sewerage chargefor the period up to 2020, resulting in a 10.4% hike in overall bills, equivalent to £40 per householdper year. Thames Water admits that the reason for this increase is specifically to cover the cost of theThames Tideway Tunnel, and that without the project they would propose a 1% cut in bills instead ofa 10.4% rise. This comes on top of a previous attempt by Thames Water from August 2013 to pass

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

As an MP representing many thousands of Thames Water customers who are concerned about therising cost of bills, I am sceptical of the passing on of the cost of the project to these customers. Ibelieve that if Thames Water wants to invest in this infrastructure, it should look to do so withoutfurther burdening their customers. I therefore welcome the fact that any specification notice would putthe financing of the project out to tender, and possibly therefore leading to a better deal for myconstituents, and indeed water customers across the whole of the Thames Water area.

Moreover, as MP for Chelsea and Fulham, I question the need to dig the Tideway Tunnel fromFulham. I am opposed to the use of the Carnwath Road site for the project, and the compulsorypurchase of land at the site.Over the last several years, I have participated in two large public summits and numerous meetingswith residents’ groups. I can confidently state that the local community is overwhelmingly hostile tousing Carnwath Road in this way. Carnwath Road Riverside is in the heart of a residential area, with15,000 homes and 2,000 businesses located within 2,000 metres of the proposed tunnellingoperations. A number of businesses are located on the site itself, and would be lost, withconsequences for local employment. Each of the surrounding streets is predominately residential, andthere are seven schools and nurseries in the immediate area.

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

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

Greg Hands MPMember of Parliament for Chelsea and Fulham