March 24 (Reuters) - British utility Thames Water has begun a hunt for international investors to pay for the construction of a 15-mile (24-kilometre) “super-sewer” in London, a British newspaper reported, without citing sources.
Britain's biggest water and sewage services provider will formally advertise for backers in May in a process led by the investment bank UBS AG, the Independent said. (link.reuters.com/geb87v)
Thames, owned by a group led by Australian investment bank Macquarie and including Chinese sovereign fund China Investment Corporation, is expected to get some of the project’s funding from its shareholders. The Independent said the project, called the Thames Tideway Tunnel, would cost 4 billion pounds ($6.60 billion).
It added that Thames would set up an investment vehicle that would own the tunnel, whose investors would be repaid with interest from increased water bills paid by the utility’s customers.
Thames had submitted plans in December to increase water bills by 11 percent for its 14 million customers between 2015 and 2020 to fund the sewer, which will run west to east across the capital.
Preliminary work on the tunnel, which Thames Water has said was needed to provide additional capacity to London’s ageing sewer network, is due to start in 2015 after it gets permission from planning authorities.
Thames Water could not be reached for comment outside of regular business hours.
$1 = 0.6063 British Pounds Reporting by Richa Naidu in Bangalore; Editing by Stephen Coates