News & Media
September 11, 2015

New infrastructure provider to let £2 billion NEC contracts for Thames Tideway tunnel

New infrastructure provider to let £2 billion NEC contracts for Thames Tideway tunnel
Thames Water’s new ‘infrastructure provider’, Bazalgette Tunnel Limited, is set to let around £2 billion of NEC contracts to deliver the 25 km long Thames Tideway tunnel in London. Work on the eight-year project will start next year.
 
The ‘super sewer’ is the biggest tunnelling project ever undertaken by the UK water industry. It was tendered as three similar-sized main contracts: west, central and east. The total estimated value of the three contracts is between £1.4 billion and £2.25 billion.
 
All three contracts are being let under the NEC3 Engineering and Construction Contract option C (target contract with activity schedule) with 50/50 pain/gain share arrangements.

Joint ventures


The three winning NEC contractors are all joint ventures of major international construction companies. The west section has been won by BMB, a joint venture of BAM Nuttall, Morgan Sindall and Balfour Beatty; the central section will be built by FLO, a joint venture of Ferrovial Agroman and Laing O’Rourke; and the east section has gone to CVB, a joint venture of Costain, Vinci and Bachy Soletanche.
 
Other organisations shortlisted for the contracts included Bouygues and joint ventures of Dragados and Samsung; Skanska, Bilfinger and Razel Bec; Bechtel and Strabag; and Hochtief and Murphy.
 
Amey will provide systems integration across all contracts under a £10–15 million ECC option E (cost reimbursable contract).

Infrastructure provider


The employer is Bazalgette Tunnel Limited, a specially created independent infrastructure provider that successfully bid to finance and deliver the project for Thames Water. It is a consortium of investors comprising funds managed by Allianz, Amber Infrastructure Group, Dalmore Capital Limited and DIF.
 
Bazalgette, which now has its own licence from water industry economic regulator Ofwat, is chaired by former Carillion chairman Sir Neville Simms. Chief executive officer is Andy Mitchell, former programme director of the £14.8 billion NEC-procured Crossrail project.

Eight-year programme


Due for completion in 2023, the Thames tunnel will be built from 24 construction sites across London. The project will employ 4000 people directly and create another 5000 jobs indirectly.
 
The work involves building a 7.2 m diameter sewer up to 65 m under the River Thames between storm tanks in Acton, west London to Abbey Mills pumping station in the east. It will pick up 34 combined sewer overflows along the way and have a storage capacity of 1.6 million m3.
 
Most of the 39 Mt annual storm discharges from the overflows − which currently go straight into the river − will be transferred from Abbey Mills to Beckton sewage works via the £635 million Lee tunnel, which is also being built using ECC option C by a joint venture of Morgan Sindall, Vinci and Bachy Soletanche.
 
CH2M Hilll was appointed programme manager for both tunnel projects in 2008.

POSTED BY NEC
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