Unit 1 Micro: Costs and Benefits of a Super Sewer for London

Thames Water has plans for a super sewer running 20 miles from Hammersmith to Beckton but the plan has come up against intense opposition from many local resident groups. It is a good example to use of cost-benefit analysis in action with a project that will directly affect millions of people living and working in the capital. There is an almost unending list of stakeholders involved in the debate.

Under existing plans from the regional water monopoly, a new Thames Tunnel would run from west to east London collecting 39 million tonnes of sewage discharged into the River Thames every year especially after periods of heavy rain fall

The estimated cost of construction will be over £3.6 billion most of which will be recouped by adding £60 to £65 per year onto water bills for a number of years.

As always with these huge investment / infrastructure projects the evaluation of the economic and social costs and benefits figures strongly in the assessment about the likely impact of the scheme.

For Thames Water, the project is vital in addressing structural problems with the sheer volume of sewage that is pumped into the Thames each year. They claim that “Sewage causes significant environmental damage, killing fish, polluting the river for those who wish to use and enjoy it and affecting the future of our capital city.” Students might also consider the wider effects of sewage discharges on the attractiveness of London as a venue for tourism and foreign investment.

Opponents of the scheme argue that there are better more cost effective and environmentally-effective approaches to what is agreed to be a major problem facing one of the world’s biggest and most successful cities. Critics also point to the forecast hike in water bills and question what effect this will have on hundreds of thousands of cash-strapped Londoners many of whom live in relative poverty. For a sample of their opposition head to the RATS website (Residents Against Thames Sewer)

Suggestions for further reading:

This BBC news video reports on the issue and this eight minute video (below) from Thames Water provides background from the point of view of Thames Water.

Another related video is quite good for demonstrating economies of scale in the Thames Water business

BBC news: In pictures: The sewers of London