Thames Tideway – a new era for privately financed infrastructure

Construction industry veteran Sir Neville Simms was appointed as non-executive chairman of Thames Tideway Tunnel Limited, the new infrastructure operating company set up to build, operate and own the proposed Thames Tideway Tunnel in London, last December.

Sir Neville Simms

His background in contracting, private financed construction and the management of big businesses make him well suited to driving this uniquely structured project which will see the new £4.2bn infrastructure asset constructed, operated and privately financed separately from the incumbent regulated Thames Water business.

His task is to form the new infrastructure operating company from scratch – a job that is not without its challenges.

Simms discusses these challenges with Infrastructure Intelligence editor Antony Oliver.

You have been brought in to “focus on preparing the landmark project for its move to the delivery phase, pending the granting of planning consent”. How do you describe your role?

I have been hired to set up Thames Tideway Tunnel Limited, the new infrastructure provider company that will construct and operate the new Thames Tideway Tunnel. My key task is to build a team. A team that is credible and competent to future investors and that can demonstrate it is capable of picking up this important project and delivering it on time and to budget.

The delivery structure is very different from other privately financed projects. How do you describe it?

I like to describe the project as having a ship and dock structure – Thames Water is the dock in which the new Thames Tideway Tunnel Limited infrastructure provider is constructed. When the time is ready, planning consent is granted, operating licenses are agreed with the regulator Ofwat and investors are in place, the new ship will sail out of the dock and become a new independent company. At this point the only link with Thames Water will be via a series of commercial contracts, including for operation and maintenance of the tunnel asset.


Sir Neville Simms will take part in the utilities panel at the 2014 ACE annual Conference to be held on 21 May.

For details and to book your place at this event click here

How does Thames Tideway Tunnel Limited interface with the Thames Water team now developing the project?

We work in partnership with the Thames Water and CH2M HILL teams, working to influence the decisions – without specifically having accountability but knowing that we will be responsible for the project’s successful construction and operation later. At the moment the team is less than a dozen – Andy Mitchell joins from Crossrail in the next month or so – but it will grow rapidly as we prepare to take on the project in 2015 to start construction.

Is the project on schedule?

The Thames Water and CH2M HILL teams are making progress preparing the project technically and taking it through the planning process. This remains the responsibility of Thames Water until government formally approves the scheme and the regulator Ofwat grants a licence for us, as the infrastructure provider company Thames Tideway Tunnel Limited, to take over and build out the project. This is still expected in the middle of 2015. My task between now and then is to set up Thames Tideway Tunnel Limited, build the team and help secure the investment support.

You have pioneered and driven many innovative private finance structures throughout you career in construction – is this structure unique or could it be repeated? 

This is certainly a very good and welcome development of the privately financed infrastructure model and the fact that it has not been done in this way before is, in many ways, what it so attractive to me. We are levering private money in to finance major infrastructure and funding it under a regulated environment. Is it pioneering? I’m not sure. Using a separate vehicle to deliver a project isn’t new. But what is new is that we are creating a separate regulated infrastructure provider alongside the regulated Thames Water business with separate investors. Whether it can become the model for future private infrastructure investment remains to be seen. It relies, of course, on having a regulatory framework and perhaps if that increases across different sectors in the future this model will be appropriate.

What do you see as the critical risks to manage?

On a project like this there are two main risks that investors will look at. The first, of course is construction risk – can we deliver the construction programme to time and to budget? My task is to put together a team that can give investors the confidence that this will happen. The fact that we will be following directly from a very successful Crossrail delivery will only help. The second risk for investors is how much will their investment be able to earn and over what period – this is a matter that will be decided through an open competition for the future ownership and financing of the project, which is due to start in May this year.

What about other political risks – is there a chance of the project being derailed by planning delays?

I have spoken with Infrastructure minister Lord Deighton and he has confirmed that this project is a priority for the government. His message is that he is available to help at any point to ensure that the development, procurement and financing process goes ahead smoothly. Across the political spectrum there is also strong support for this project and I expect this to continue, particularly given that this project is being delivered by Thames Tideway Tunnel Limited as a national asset rather, than simply as part of Thames Water’s operational assets.

How difficult do you expect will be to find investors for this project? 

Without question the investors are interested as they are interested in all quality infrastructure projects at the moment. This will be a quality project.


Sir Neville Simms will take part in the utilities panel at the 2014 ACE annual Conference to be held on 21 May.

For details and to book your place at this event click here

If you would like to contact Antony Oliver about this, or any other story, please email