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Infrastructure Investment World 2013Building for 22ndcentury London
Mike Gerrard
Managing Director, Thames Tideway Tunnel
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A major UK infrastructure project with an
estimated cost of 4.1bn
Vital to Londons future and a priority for the
Government and Ofwat
Financed by private sector investors and
benefiting from an enhanced regulatory
framework and Government support
Competition to launch 2014
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Population increase in
London in the last century...
... has created 2 problems:
Overloaded sewage
treatment works;
discharging directly
into the river afterrainfall
Overloaded sewer
network; discharging into
the river via CombinedSewer Overflows (CSOs)
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Acton Storm Tanks
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West
Bam Nuttal, Balfour Beatty, Morgan Sindal JV
Costain, Vinci, Bachy JV
Dragados, Samsung JV
Ferrovial Agroman, Laing ORourke JV
Central
Bam Nuttal, Balfour Beatty, Morgan Sindal JV
Costain, Vinci, Bachy JV
Ferrovial Agroman, Laing ORourke JV
Skanska, Bilfinger, Razel Bec JV
East Bam Nuttal, Balfour Beatty, Morgan Sindal JV
Costain, Vinci, Bachy JV
Bechtel, Strabag JV
Bouyges Travaux Publics
Hochtief, Murphy JV
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A new dedicated perpetual utility company
(Infrastructure Provider IP)
Flood and Water Management Act 2010
Regulated by Ofwat
Supported by Government
Established by competition
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Sponsored by Thames Water
Project manager CH2M Hill
Planning application submitted
Close cooperation with Lee Tunnel and Crossrail
Development of IP resources
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Land assembly
Tender manager construction and IP
Interface works
Billing customers
Precluded from bidding for the IP
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A unique opportunity to invest in a new UK regulated utility
company
~1bn equity opportunity
Familiar regulatory framework but enhanced in certain key areas
cost of capital bid by investors and fixed up until project
acceptance
investment remunerated during constructiondividend yield
during construction
Government support will further protect investors
sharing of certain risks mitigation of exceptional events,
including where this offers customer better value for money
total investor funding requirement capped
Investors do not need project delivery expertise the IP will
already have this
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Planningapplication
submitted
Start
construction
procurement
IP market
engagement
Start IPprocurement
Planningdecision
Binding bids
due before end
2014
IP financial closeand licence
award
Construction
contracts award
Start early
works/
mobilisation
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