A research study commissioned by the Department for Environment, Food and Rural Affairs (Defra) has found that the Government Support Package (GSP) provided for the Thames Tideway Tunnel could serve as the financial model for other large scale infrastructure projects with a large public benefit - for example nuclear power stations and water reservoirs.

The evaluation projec by Ipsos Mori UK, which was spread out over a number of months, beginning in February 2025 and completed in November 2025, was to determine if the GSP elements were the right ones to include and could support the use of a similar government support on other HMG sponsored projects or similar private sector projects.

Published by the Department for Environment, Food and Rural Affairs on 1^st July 2026, the report - Process Evaluation of the Thames Tideway Tunnel – Government Support Package says:

“All stakeholders involved in the design and implementation of the TTT GSP stated that they felt a similar support package could be used for large scale infrastructure projects which had a large public benefit…..”

Commenting on the Specified Infrastructure Projects (SIP) Regulations and the Special Administration regulations, the report describes the SIP regulations as “fundamental in enabling the TTT project by establishing the infrastructure provider, which ring-fenced the project's financial risks from Thames Water's balance sheet.”

The ability to collect revenue from day one as part of the licencing agreement was also seen as crucial in supporting the attraction of investors to the TTT project.

While not directly impacting project delivery the report says the Special Administration regulation provided “a clear pathway for government intervention in the unlikely event of Tideway's insolvency, offering further reassurance to investors.”

The 61 page report is accompanied by a suite of lengthy and detailed technical legal contract documents documents relating to the project licence awarded by Ofwat to design, build, finance, operate and maintain the Thames Tideway Tunnel.

Aim of GSP was to reduce “risk for investors to a tolerable level”

The report says the aim of the GSP was to reduce “risk for investors to a tolerable level”, helping provide value for money for Thames Water customers who will ultimately be paying for the TTT over its design life of 120 years.

The key agreements of the GSP were:

A Supplemental Compensation Agreement (SCA) - An agreement to cover risks that exceed the level of insurance the commercial market is able to provide and where any of the agreed insurances become unavailable as a result of market events.

A Market Disruption Facility (MDF) - An agreement where Government agrees to lend the infrastructure provider money on commercial terms, should the debt capital markets become unavailable.

A Contingent Equity Support Agreement (CESA) - An agreement where if costs escalate beyond a pre-agreed (remote) threshold and the infrastructure provider is unable to provide further financing, Government can inject equity to complete the programme (Government can alternatively choose to discontinue the GSP).

A Special Administration Offer Agreement (SAOA) - An agreement whereby if the infrastructure provider is in special administration for more than 18 months, Government will offer to purchase the Infrastructure Provider (IP)or discontinue the programme. And

A Discontinuation Agreement (DA) - An agreement under which the terms of compensation after a discontinuation event are set out.

Without GSP Tideway project would not have been an investment grade opportunity

Key findings in the report are based on data collected from stakeholder interviews and a review of project data and cover a series of key evaluation questions set by Defra, including:

To what extent did the GSP enable the TTT to be financed and constructed?

The evaluation found that the GSP was crucial in securing the finance to construct the TTT, and particularly securing appropriate, long-term and low-cost finance from investors such as pension funds. Without the GSP, the Tideway project would not have been an investment grade opportunity, meaning the appropriate investors would not have funded the project, viewing it as too risky.

Were all of the GSP elements necessary?

At the time of the design of the GSP, all of the GSP elements were seen as being necessary. This was due to the time the package was developed and the key contextual economic factors at the time – namely the aftermath of the 2008 financial crisis. However, in hindsight, given the development and recovery of the financial markets, many stakeholders reported that the MDF was not necessary for the TTT project, as there would also be debt finance available to the project.

How did the legal and governance frameworks of the GSP, Liaison Agreement, Independent Technical Advisor (ITA) and Project Licence support the construction of the TTT?

The whole Tideway support package, including the GSP, licencing agreement and contracts and governance processes were reported to work well in general in supporting the monitoring of the TTT project.

The report says that as the GSP was not utilised, there are no specific lessons which can be learned about the processes which are required to trigger the agreements. However, tone key lesson from the CESA is that contingency planning, at points where cost overruns had been identified, was seen to be helpful in ensuring that staff within Defra were fully prepared in the event the CESA was likely to be triggered.

It describes the main opportunity that the GSP brought to the delivery of the TTT project as the investment it helped to secure, which was “at a lower cost than would have been achieved in the absence of the GSP.”

Click here to download the report - Process Evaluation of the Thames Tideway Tunnel – Government Support Package