Ofwat has published two separate Thames Water PR24 performance commitments for the early handback and sale of land related to the Thames Tideway Tunnel project - both of which have been redacted.

 Photo: Tideway Blackfriars site 

Ofwat and Thames Water have an agreed strategy for acquisitions and disposals of project land that sets out the process for engagement and reporting to Ofwat.

Independent external assurance will be provided by the company to Ofwat for each plot sold in the relevant reporting year to confirm the percentage of land sold is a fair reflection of the split between the land sold and the land retained relative to the acquisition price paid by the company.

In addition, Ofwat may also require independent external assurance in respect of any plot in order to confirm that Thames Water took appropriate steps to maximise customer value.

The performance commitment for managing the early handback of Tideway project land is aimed at incentivising the company to be ready to take back land related to the Thames Tideway Tunnel project from Bazalgette Tunnel Ltd, which trades as Tideway, in order to avoid project delays or cost overruns that would negatively impact customers. It sets out the accelerated land handback strategy and agreed processes to deliver early handback and so reduce overall and individual organisational project risk in the interests of customers.

During the period April 2025 to March 2030 each area of project land to be handed back will have a target date that is three months after the Project Manager appointed by Tideway certifies that it is ready to be handed back to the company. In line with the Joint Approach, the target date relating to each area of project land to be handed back will be reforecast and revised quarterly.

Outperformance payments will apply based on the number of full months before the target date that each area of project land to be handed back is received by the company. Thames Water will have one full month after a target date for each area of project land to be handed back before an underperformance payment will apply.

The annex sets out 87 out of 90 handback areas listed in the Joint Approach agreed between Thames Water and Tideway - three areas relating to Dormay Street are not intended to be handed back. However, the Annex has been heavily redacted and the list of all 87 areas have been completely blacked out.

The separate PR24 Tideway performance commitment – Maximising the value of Tideway project land sales - has likewise been redacted. The performance commitment measures the net profit or loss made on the sale of land related to the Thames Tideway Tunnel.

Benefits of the performance commitment are to provide transparency and incentivising the company to increase the financial benefit for customers from disposals of project land.

The performance commitment measures the total net profit or loss made on the sale of any of the plots related to the Thames Tideway Tunnel project that are scheduled to be sold in the 2025-30 period. Again, details of the surplus land acquired to date and scheduled for disposal in the 2025-30 period has been redacted and completely blacked out.

Thames Water is required under Condition K of its licence to secure the best price for land disposals where the relevant threshold is met. In addition, Ofwat says it will take account of the efficiency of the company's land disposals programme and the overall impact on customer value and may make an adjustment at PR29.