SESRO costs climb as Thames submits detailed design report to RAPID

The cost of delivering the new south east strategic reservoir (SESRO) at Abingdon has more than doubled since the last regulatory assessment gate.

That’s according to the Gate Three submission to the Regulators’ Alliance for Progressing Infrastructure Development (RAPID), published by Thames Water and its partners Southern Water and Affinity Water last week. The scheme cost is now £6.6bn, within a range of £5.5bn-£7.5bn, up from £2.74bn at RAPID Gate Two (2022/23 cost base).

The document explained that the capex cost estimates at Gate Three are based on a more granular concept design and a ‘bottom-up’ cost estimate of many of the main elements, compared to the approach used at Gate Two. The preferred size of SESRO was confirmed as 150Mm³ of raw water storage, with resources to be shared 55% to Thames Water, 30% to Southern Water and 15% to Affinity Water.

The five key areas of cost increase are: construction (including from greater earthworks volume); enabling works (including roads and other utilities); landscaping (which now includes maintenance); the intake pumping station (which needs to be bigger than previously planned); and tunnels and shafts (which also need to be increased in size).

In addition, a bottom-up approach has now been adopted for quantifying risk, and lessons learned from other major projects, including the Tideway super sewer scheme.

Despite the higher cost, the reservoir remains essential for the south east’s water resilience, and the partners seek permission to progress to RAPID Gate Four. Thames has said its region needs an extra 1bn litres of water a day by 2050.

The Gate Three submission is a milestone in the reservoir’s development to date, effectively marking the end of the feasibility stage and the start of the organisational delivery phase. Among the tasks undertaken ahead of Gate Three were: scheme design; masterplanning; submission of the Environmental Impact Assessment scoping opinion to the Planning Inspectorate; ground investigations and a clay companion trial; a non-statutory public consultation in spring/summer 2024; and securing conditional approval from Ofwat for the preferred procurement strategy, which includes Early Contractor Involvement.

The next steps for the project include: completing the Special Infrastructure Projects Regulations specification (Q1 2026); a Development Consent order submission (Q4 2026); and the RAPID Gate Four submission (Q1 2027). This is all working towards an operational start date of 2040.

Nevil Muncaster, strategic water resources director at Thames Water, said: “The report marks a critical milestone in our development of the reservoir. It reflects the extensive work we have done to evolve our proposed design and better understand what it will take to deliver it.

“Working through the development process, we are applying lessons from other major projects in the UK, wherever we are able. This has included providing an update on what we expect the reservoir to cost as early as possible and well before construction, when it becomes difficult to adapt to revisions.

“The reservoir is a critical piece of infrastructure for meeting future water demand in the South East and remains one of the preferred options in our Water Resource Management Plan which sets out our strategy to protect water supply for the next 50 years and beyond.’’