Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what commitment she has made to provide loans should the Thames Tideway Tunnel infrastructure project be unable to access debt capital markets.

A Written Ministerial Statement of 5 June 2014 (Official Record, Col. 11WS) sets out the reasons for the Government’s decision to provide contingent financial support for the Thames Tideway Tunnel (TTT) project, and the scope of that provision. The TTT project will be financed and delivered by a competitively tendered Infrastructure Provider (IP), which will be an entirely separate entity to Thames Water. This will keep project costs down and provide value for money for customers.

The support package is designed to make sure taxpayers’ interests are protected throughout the construction phase to which it applies, and the likelihood of it being called upon is remote. If the support package is not called upon, there will be no cost to the taxpayer. The IP will pay the Government for certain limbs of the support package at an appropriate commercial rate. The precise financial details of the package and particular circumstances under which Government equity or short-term loans would be provided to the project remain commercially sensitive while procurement of the IP is ongoing.

The Government formally notified the European Commission of the State Aid implications of the support package earlier this year. The EC has yet to announce its decision on State Aid approval. We will inform Parliament of the outcome of Thames Water’s procurement of the IP when it is complete.