Wednesday, 30 November 2011
This week the British government announced support for a range of new infrastructure projects designed to boost the economy. Many of these will be greeted with broad support. However one planned piece of new infrastructure that causes much consternation is the ‘Thames Tideway’ Super-sewer.
By way of explanation, the Super-sewer is required because London’s existing sewer network is (literally) full to overflowing, as it carries both sewerage and rain water in the same system. This means that every time it rains heavily, excess waste water including raw sewerage gets dumped in the Thames. Because the Thames is tidal, it can take weeks to flow downstream, making for an unpleasant and environmentally harmful body of water running through our capital. The Super-sewer that has been proposed by the region’s sewerage company, Thames Water, would prevent the overflows by adding an extra tunnel running from West London to East London where waste water could be processed. Current estimates of the cost are £4.1bn, which would be recouped by increasing the mandatory sewerage charges paid by Thames Water’s customers.
The scheme is described as ‘essential’ if the UK is to meet its environmental targets set by the EU. It has already been under consideration for years, but looks like it may soon get the green light. There are plenty of reasons to believe that would be a mistake. Construction work would destroy several of London’s green spaces, and worsen the already terrible congestion on the roads. The impact on residents’ bills would be dramatic. But what worries me most of all is the scale of the project, and how the risks involved in such a big project would be dealt with.
Let us imagine, hypothetically, what would happen if the project suffered major cost overruns. The likelihood of this happening is debatable, but the precedent set by another giant tunnelling project, Boston’s ‘Big Dig’ should leave us pessimistic. The Big Dig was expected to take 16 years and cost $6bn*. Instead it took 27 years and cost $22bn. In the event such a cost overrun occurred, who would be liable? In the first instance, Thames Water should be expected to shoulder the risk. But an overrun of several billion could force the company into bankruptcy. But you cannot just ‘wind up’ a utility – it delivers water to 14m people after all - and so it would likely be bailed out by the government. And so in the end the project risk would fall on Thames Water bill payers and the British taxpayers.
The contractors and project managers engaged to undertake the project would not be blind to this fact. It would set up the perverse incentive for firms to underestimate the costs initially, but not to control them properly later. This has happened before when Metronet, the Public Private Partnership tasked with upgrading parts of London’s Underground went spectacularly bust.
If a mega-project is by its nature untenable, then what are the alternatives? In my opinion, the way this question is framed could be critical in coming up with innovative solutions. When the problem is sewers overflowing, it is easy to conclude ‘we need more sewers.’ But that is like seeing congested roads and saying ‘let’s build more of them,’ an idea that was discredited first in 1962 and now by more recent research. How about finding ways to reduce the volumes that go into the sewers in the first place? Or developing micro-scale sewerage treatment plants (analogous to micro-generation) and build several hundred around London? How about finding a way to siphon rain-water into the Thames? Or increasing capacity by installing more pumps? More and better ideas like these might be discovered if the problem was opened up to wider debate in the public and in engineering departments around the world.