Transport Insights

The transport stories you won't see in the industry-friendly media

Author

Chris Ames

Tag: lower-thames-crossing

  • A cast iron non denial

    National Highways has published a response to the Sunday Times story this week that said the £11bn Lower Thames Crossing (LTC) is “poised to be built with foreign steel”, but I’m not sure whether its a carelessly worded rebuttal or a carefully worded non denial.

    The gist of the Sunday Times story is that UK-based steel manufacturers are not able, and will not be able, to produce the “low embodied carbon steel” that the government-owned company has promised to use as part of its greenwashing.

    Industry sources say this will exclude domestic manufacturers from the tender and force ministers to approve the provision of steel from abroad that meets the UK’s green targets. 

    Clearly the alternative to sourcing steel from abroad is to drop the “low embodied carbon steel” pledge.

    There is also a question of *when* as the tunnel is nowhere near being built but:

    Tata Steel is in the process of building an electric arc furnace on the site of Britain’s biggest blast furnace steelworks in Port Talbot, south Wales. It is understood that the furnace will not be up and running to tender for the multimillion-pound Lower Thames Crossing contract.

    The National Highways webpage starts off by saying the Sunday Times claim that the LTC is set to be built with foreign steel “is not the case”, adding:

    No procurement process for steel is currently under way.

    Our Delivery Partners have carried out early market engagement simply to understand existing capability ahead of launching procurements later this year. This engagement shows that the UK steel sector can meet between 85% and 90% of the project’s requirements, reflecting both the capability and ambition of British manufacturers.

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  • Taxpayers to cough up even more for “privately funded” Thames Tunnel

    The Times story on the Lower Thames Crossing raises further doubts that the £11bn project will be privately financed, even beyond the £3bn that the taxpayer is due to put in before anything happens.

    The taxpayer is set to lose net income of at least £120 million a year as a result of the financial arrangements for a new road tunnel under the Thames, The Times can reveal.

    Government plans for the Lower Thames Crossing are built on handing the revenues from the existing tolls on the Dartford Crossing to a new private operator, which will be allowed to keep them in perpetuity.

    My take on this is that if you are diverting £120m of revenue annually and for ever to pay for a project, you are at least partially funding that project (again, beyond the £3bn) and no amount of smoke and mirrors can disguise that.

    The Times reports that:

    Under the Transport Act 2000, these revenues go directly to the DfT, not into the Treasury’s coffers, and must be used for improving transport. The DfT did not respond to TAN’s question as to whether this income would be “included in DfT’s future budgets as a loss” or if it had been factored into the cost-benefit analysis for the Lower Thames project. The DfT also declined to answer similar questions from The Times.

    This is clear obfuscation from the DfT but, whether the money is a hit to the transport budget or will be refunded by the Treasury, it’s taxpayers’ money.

    Elsewhere in the paper, the piece’s author, Alistair Osborne, comments

    …you’d think that before ministers committed £3.1 billion of taxpayer’s money and started early construction works, they might have bothered to produce a full business case for the link, instead of opting to wait until 2028. Or explained why it’s still a zippy scheme, despite it seeming to fail the DfT’s own “value for money” test. Or actually come clean about the implications of its “preferred financing option”, which would see both the crossing and existing taxpayer income transfer to a private sector owner in perpetuity.

    I made similar observations here last month.

    Having said that, the current revelations on the funding represent great work by TAN (Transport Action Network) and the journalist.

  • Facts won’t be fixed on Thames tunnel till 2028

    Transport Action Network (TAN) has seized upon the confirmation that the Lower Thames Crossing will not open until 2034, but even this date is said not to be realistic and the mega-project is not even due to have a full business case (FBC) until 2028.

    The delay to the FBC means that Labour will continue to throw money (£3bn) at the project before working out whether it is worth doing and the rest of us will be kept in the dark.

    TAN has pointed to the appointment letter naming Kate Cohen as the Senior Responsible Owner (SRO) for the project:

    You are required to undertake this role until the end of the project planned for 2034, or until the responsibility is transferred. 

    In fact, the National Infrastructure and Service Transformation Authority’s annual report 2024-25 states:

    Compared to financial year 23/24-Q4, the project’s end-date at 24/25-Q4 remained at 20/04/2034.

    […]

    This baseline is no longer viable after a second Written Ministerial Statement was issued on the 4 October 2024 extending the Development Consent Order Decision date until 23 May 2025 in order to allow more time for the application to be considered further, including as part of the spending review [Development Consent Order Consent granted 25 March 2025]. The project is currently working on the impact to the Open for Traffic following the second Written Ministerial Statement.

    No-one seems to have told Matt Palmer, executive director of the Lower Thames Crossing, about 2034. In this recent press release about a non-existent piece of tunnelling kit, he said:

    The search for our giant tunnel boring machine is now on, putting us on track to open the Lower Thames Crossing in the early 2030s. 

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  • Thames Tunnel hole gets bigger

    The Financial Times has picked up on the spiralling costs of the Lower Thames Crossing (LTC), as well as the huge sums that we will all be putting in, before private finance comes riding over the hill.

    Taxpayers will contribute more than £3bn to the Lower Thames Crossing despite ministers’ plans to seek private finance for the most expensive new highway in British history.

    The cost of the project, the first wholly new crossing across the river Thames to the east of London in 60 years, has risen from an estimate of between £5.3bn and £6.8bn in 2017 to almost £11bn, the Treasury has confirmed.

    The first figure, the £3bn of public money, may be news to some people but it is simply adding £1.2bn of historic costs to the £1.8bn that the Treasury has allocated across this financial year and the next three, including nearly a billion in last week’s Budget.

    But the cost increase to a current price tag of £11bn means a big rise in the part that the government is hoping to get private finance to contribute, to get them into a hole on a project that is otherwise unaffordable.

    The government hopes it will secure about £7.5bn of private capital, up from a figure of £6.3bn set out in March by National Highways, the public body responsible for the scheme between Kent and Essex.

    Predictably, Transport Action Network (TAN) has condemned the “utterly predictable” news, which it says will lead to significantly higher tolls being charged at the existing Dartford Crossing and the LTC.

    TAN has previously calculated that tolls at Dartford could triple to pay for the LTC. Director Chris Todd said:

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  • Labour keeps digging on Thames Tunnel with another £891m

    Labour is to throw the best part of another billion pounds at the Lower Thames Crossing as it looks for a way of funding the mega-project.

    Today’s Official Treasury Budget document states:

    Funding for the Lower Thames Crossing in 2027-28 and 2028-29 – The government is committing a further £891 million to complete the publicly funded works for the Lower Thames Crossing, as part of its staged approach, after which the private sector will take forward construction and long-term operation.

    This is on top of the £840m already allocated for 2025-26 and 2026-27. Ironically, as I have reported, £250m for the current year was allocated in last year’s Budget but kept quiet.

    The budget document says the further £891m is “the final tranche of government support to enable the private sector to take forward construction and long-term operation”.

    It adds:

    The government’s preferred financing option at this stage is the Regulated Asset Base (RAB) model. The project will be taken forward on that basis, with formal market engagement launching in 2026.

    It looks very much as if ministers are some way from securing finance for building the project and even further from anything actually happening.

    In the meantime, they tout it as a “key driver of growth”, without any real evidence that this is true.

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  • Going underground?

    The process of getting the £10bn Lower Thames Crossing under the ground is rumbling on without any sense of urgency, almost as though the government doesn’t want to do it, but can’t admit it.

    The story so far is that Labour has said that the clearly unaffordable project is to be paid for on the never never, sorry privately, and has granted a development consent order.

    The next step was apparently the submission of a full business case (FBC) for the scheme, in order for funding to be released. Well, two lots of funding have been released but there is no sign of an FBC.

    The Department for Transport (DfT) is hoping to work some magic on the FBC to improve the benefit cost ratio (BCR).

    According to the (hopelessly out of date) accounting officer assessment, the last investment decision point was the 2020 outline business case and the BCR currently gives low vfm at 1.46 and is expected to fall further following “the recent lowering of the future economic forecasts for the UK economy and the consequent fall in value of journey time savings”.

    But at FBC, there is an expectation that key strategic benefits not reflected in the BCR will be quantified.

    Is the government hiding the FBC or still trying to make the numbers look better, as it claims to be doing with smart motorway evaluations?

    In the meantime, the DfT is trying to get people in to help it progress the private financing model.

    (more…)

  • Cohen remains in charge of Lower Thames Crossing

    The Department for Transport’s (DfT) longstanding roads delivery director, Kate Cohen, has taken over the role of senior responsible owner of the Lower Thames Crossing (LTC).

    The news, reported by Highways magazine, follows a report in the Guardian, since denied by the DfT, that the government-owned company had been stripped of responsibility for the £10bn+ project.

    According to the DfT website, Cohen is director of Roads and Projects Infrastructure Delivery, a section that includes responsibility for the LTC.

    Speaking to Highways, National Highways chief executive Nick Harris stressed that the company remains responsible for delivering the LTC, but National Highways’ Sean Pidcock had been its senior responsible owner since 2021.

    Harris said:

    The DfT has recognised the size of the Lower Thames Crossing project means they have to put focus on it and I am really chuffed to see Kate Cohen becoming the SRO. She is going to focus on the LTC and we have worked with Kate on the rest of the portfolio and I think that is a decision that makes a lot of sense.

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  • Ministers bury Thames tunnel bung as sunk costs hit two-thirds of benefits

    The Treasury has confirmed that chancellor Rachel Reeves secretly awarded the Lower Thames Crossing a quarter of a billion pounds in last year’s Autumn Budget, as the cost of the scheme are set to hit £2bn, before construction begins.

    The preparation costs for the planned £10bn+ tunnel between Kent and Essex are now likely to reach two-thirds of the scheme’s projected benefits.

    Labour has said it will examine using a form of private finance for the project, which it appears to consider unaffordable and which will be funded outside the usual road investment strategy machinery.

    But public funding includes £250m that was allocated to the project in Labour’s first Budget, last October, but not publicly announced until the National Infrastructure Strategy was published in June.

    This said the government was:

    providing £590 million of capital funding to progress work on the Lower Thames Crossing, in addition to the £250 million which was provided at Phase 1 of the Spending Review.

    The Treasury has acknowledged that the £250m was allocated at the 2024 Autumn Budget on a “provisional” basis as the project’s development consent order (DCO) was pending, with the infrastructure strategy being the first time the funding was revealed publicly.

    The Department for Transport has confirmed that the cash was part of the capital spending total of £21.8bn announced in the Budget.

    Following the Budget, the then transport secretary, Louise Haigh was forced to resign, following a leak about a criminal conviction that appeared to have come from No 10.

    Her successor, Heidi Alexander, then approved the DCO in March of this year, in time for the cash to be included in confirmed spending plans for 2025-26.

    (more…)

  • National Highways not stripped of LTC, government says

    The government has rubbished yesterday’s Guardian story that ministers had stripped National Highways of responsibility for the Lower Thames Crossing.

    I reported the story yesterday with the headline Ministers keep control of Lower Thames Crossing and that is indeed the government line.

    While maintaining the usual refusal to comment on “leaked” documents, the Department for Transport (DfT) insisted that nothing has changed and suggested that most of the Guardian story was based on a misunderstanding.

    As I noted yesterday, the £10bn+ plan to build a tunnel and new roads linking Kent and Essex was already classified as a “Tier 1” infrastructure project. The DfT pointed out that all such projects are “governed and funded” by the government and that key decisions “are a matter for ministers”, while delivery is the responsibility of National Highways.

    This has not changed.

    The DfT added that, as the Guardian pointed out, that National Highways is responsible for the development of the crossing and will publish a breakdown of costs in its annual report, with decisions over the scope and funding of the project are taken by ministers.

    It said that as this is how Tier 1 projects are governed, this directly contradicts the claim that National Highways has been stripped of the project.

    The DfT added that the project’s scope of the Lower Thames Crossing has been legally fixed by its Development Consent Order (DCO) which was granted by transport secretary Heidi Alexander in March, and that any material changes to a DCO, including scope, must be approved by her.

    A DfT spokesperson said:

    Backed by £590m, the Lower Thames Crossing is the most significant road building project in a generation – and will cut local congestion, better link up motorists and businesses in the Midlands and North with key ports in the South East, and spreading growth throughout the regions, as set in our Plan for Change.

    As I pointed out yesterday, Labour has actually given the project £250m as well as the £590m. More on this soon.

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  • Ministers keep control of Lower Thames Crossing

    I’m not sure how much new news there is in the Guardian’s “exclusive” story today on the Lower Thames Crossing (LTC), which is a bit confused – to say the least – and is probably a bit exaggerated.

    Citing “internal consultation documents”, the paper reports:

    Ministers have stripped the government’s road-building agency of responsibility for a £10bn tunnel under the River Thames amid a drive by Keir Starmer’s cabinet to take tight control over important infrastructure projects for fear of cost overruns and delays.

    It sounds very dramatic, but usually things in consultation documents haven’t happened yet.

    Apparently oversight of the LTC “has been taken away from National Highways and handed to the Department for Transport (DfT)”, but:

    It is understood that National Highways will remain responsible for the development of the crossing and will publish a breakdown of costs in its annual report, but decisions over the scope and funding of the project will be taken by ministers.

    The article correctly describes the LTC as a “Tier One” infrastructure project. In fact the accounting officer’s assessment for the scheme states:

    LTC falls under the Department’s definition of a Tier 1 Project and therefore adheres to control and governance arrangements within NH, DfT and HMT levels. Final approval of each stage of the business case is made by DfT and HMT ministers. Under its procurement delegations, NH would approve all other steps in the process.

    So the DfT and Treasury have had control over the mega-project’s huge costs – expected to be well above £10bn – for a while.

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