The supersewer under London may be funded by the state, it was revealed today.
Oliver Letwin, David Cameron’s strategy guru, has proposed that the Government could step in to pay for the £4 billion Thames Tideway Tunnel project.
But the Treasury and the Department for Environment are still focused on agreeing a deal with private sector companies to build the sewer, with the Government possibly taking on any exceptional risks.
The huge tunnel is designed to stop nearly 40 million tons of untreated sewage being poured into the Thames each year. But it has run into opposition from residents who would be affected during its construction. Cabinet Office minister Mr Letwin is understood to have based his proposal on the funding for the high-speed rail link from London to the Channel Tunnel.
This would be a far simpler solution than the initial plan for Thames Water to set up a body to own the scheme which would raise funding for it, including through borrowing.
The expenditure would be recovered with Thames’s 14 million customers paying around £80 more a year to fund the scheme.
A Treasury spokesman said: “The Thames Tideway Tunnel is a private sector project and should be built and financed by the private sector.
“In a project of this scale and complexity there may need to be financial support from Government and we have made it clear that we are willing to provide this where it is value for money for customers and taxpayers.”
