Water produced by 'white elephant' Thames Water scheme to cost eight times more than planned

Due to be completed in 2033, the Teddington Direct River Abstraction (TDRA) will remove up to 75 million litres of water per day from the River Thames to bolster the capital’s supply of drinking water in times of drought.

However, analysis shared exclusively with LBC suggests that the business case for the project may have been overstated, with Thames Water’s sums being based on the site operating year-round, rather than the 6.5 weeks per year it will actually be in use.

The beleaguered water company insists the scheme remains “one of the best value options” to protect the capital from droughts, in spite of fresh questions about the cost of the water it produces.

Local MP, Munira Wilson, believes that the figures speak to a broader pattern of Thames Water “squandering bill payers’ money”, while campaigners claim costs will inevitably be passed on to Thames Water’s 16 million customers.

The discovery comes as new prime minister Andy Burnham is reportedly poised to take the beleaguered water company into special administration.

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Before commissioning the project, which the company’s accounts suggest could cost £535m, Thames Water carried out research into the average cost of the TDRA for abstracting, storing and treating water.

The Average Incremental Cost, an industry-standard measure, was calculated by taking the construction and operational costs of the project and dividing that by the total amount of water produced.

Thames Water priced the average cost of TDRA providing water at 63p per cubic metre by assuming that the site will operate 365 days per year.

Yet according to its own planning papers, it will only run for 45.5 days each year, dramatically increasing the cost to an average of £5.12 per cubic metre.

With these figures based on prices from 2022/23, the final cost when the scheme opens in 2033 is likely to be considerably higher.

“It's been badged as a cheap scheme because they use this 365-day operation figure - and it simply isn’t true,” says Ian McNuff, an Olympic bronze medal-winning rower who founded Save Our Lands and Rivers (SOLAR) to oppose the building of the TDRA.

McNuff, who analysed Thames Water’s plans, argues Britain’s biggest water company has been “defensive” and “disrespectful” towards customers’ concerns.

“We believe the public has been misled, and [Thames Water] needs to be called to account for it. It is a classic defensive corporate culture that you see everywhere… They're trying to fend off what is quite plainly common sense and logic to build something more sensible.”

THE UK’S WATER SUPPLY ISSUE

Yesterday, Thames Water announced a hosepipe ban for 10.1 million customers after weeks of little rainfall and record-breaking temperatures, and the challenges of water shortages are only likely to become more acute in the coming years.

Speaking to Nick Ferrari in 2024, the then Environment Secretary, Steve Reed, warned that areas across the UK could run out of drinking water by the mid-2030s without an infrastructure overhaul.

Meanwhile, Baroness Brown, a member of the Climate Change Committee, says that the UK is facing a potential shortfall of 5 billion litres per day by the 2050s.

Part of the reason for these projected shortages is the failure to build new infrastructure. It’s nearly 35 years since the UK completed its last reservoir, the Carsington Water project.

With the capital consuming around 2.6 billion litres of water each day, there are significant concerns that the TDRA will not produce enough water to meet the scale of Britain’s water scarcity crisis.

Indeed, according to Thames Water’s own calculations, the annual output of the TDRA would not deliver enough water to cover even a day and a half of the capital’s demand.

“This is going to produce 75 million litres of water per day for 6 weeks a year,” McNuff continues.

“It's basically worth a few cups of tea,” he added sardonically. “If you're going to build supply infrastructure, build it to continually supply water because of the range of uncertainty in the future. It makes no sense at all.”

Thames Water argues that the TDRA is the scheme best suited to deal with periods of extreme heat and prolonged periods of dry weather.

The site works by removing water from upstream of Teddington Weir, where it will be transferred to a reservoir via an underground tunnel to be turned into drinking water.

The extracted water will then be replaced with treated sewage, which will be discharged just above Teddington lock, a stone’s throw away from the Thames’ first designated bathing site at Ham.

“Of the 673 kilometres of the River Thames, Thames Water is proposing to build this treated sewage outfall… right adjacent to London's first new bathing site,” McNuff observed.

“So a site where within an hour's travel you have 12 million people who can get there to enjoy a fabulous location, they are going to build a treated sewage outfall.”

Thames Water says the sewage will adhere to strict standards set by the Environment Agency.

Thames Water expects to provide drinking water for 13 million people by 2050, but the TDRA will be limited to supplying 75 million litres per day as the project cannot be scaled up.

Critics therefore argue other options should have been pursued.

Two other sites were considered for development by Thames Water and Water Resources South East, the regulator which gave the green light to the project.

Modifications to both the Mogden Sewage Treatment Works in Isleworth and Beckton Sewage Treatment Works were deemed to be more expensive than the TDRA for each cubic metre of water produced, at £1.32 and £2.66 respectively.

This, however, assumes both sites would only be capable of producing water for six weeks each year. In reality, both would be capable of operating all-year, dramatically reducing the comparative cost.

Another proposal is to improve existing infrastructure.

Research by the Liberal Democrats carried out in 2025 estimated that the capital is losing around 592 million litres of water each day because of leaky pipes.

“I don't really trust Thames Water to get these big projects right,” says Munira Wilson, the Liberal Democrat MP for Twickenham, whose constituency will host the TDRA.

“We have seen time and again that Thames Water is pretty good at squandering bill payers' money rather than investing it properly in maintaining our precious water infrastructure and our precious waterways.

“This scheme, which as you pointed out will only produce water for a few days of the year, looks like it could end up being a very expensive white elephant... We know that they built a desalination plant [in Beckton] at a cost of over half a billion pounds - and since 2010, they've only used it 5 times.”

THAMES WATER ON THE BRINK

Questions about Thames Water’s infrastructure spending come as Andy Burnham mulls nationalising Britain’s biggest water company.

Unless a rescue deal is agreed in the next few months, Thames Water could collapse under its near £20bn debt pile, forcing the government to take it into a special administration regime (SAR). This would see the company temporarily nationalised to ensure the provision of drinking water and sewage services.

Burnham says the water industry needs to be brought under greater “public control”, arguing that the system is currently not working for billpayers or providing the investment to tackle water shortages and sewage pollution.

The decision of whether to bring Thames Water into SAR represents the first test of this principle. Mr Burnham is reportedly set to take Thames Water into SAR, though it is understood that the firm’s 100 institutional investors will still bid for the company.

Though it posted a post-tax profit of £113m last week, Thames Water conceded that it is set to run out of money by the end of this year without a fresh injection of cash.

If the unprecedented step of taking Thames Water into SAR is taken, taxpayers could be on the hook for £2billion for its operating costs by the end of the year, the company says.

Last month, the government rejected the terms of a bailout plan, moving the company closer to a form of nationalisation.

The firm’s creditors proposed writing off £9.4bn of the debt and providing a fresh injection of cash, but this was rejected because of the cost to customers and delays to both infrastructure investments and environmental improvements.

Thames Water insists that a private rescue package represents the best solution for its customers.

Ms Wilson also suggested that financial pressures are pushing Thames Water to move forward with the project over alternatives.

“A cynic would argue that a company that likes to borrow heavily to the point that they're frankly teetering on the brink financially… therefore [builds] more assets against which they can borrow to raise more funding.

“I would question the motivation around building a scheme like this, which is going to deliver very little in water but helps them to, as I say, build up their balance sheet and borrow more money against it.”

Thames Water denied that the project was being used for this purpose, pointing to the regular auditing of their projects by the regulator.

A Thames Water spokesperson added: “Our proposed Teddington Direct River Abstraction (TDRA) project is nationally significant and would keep the taps flowing for millions of Londoners, supplying up to 75 million litres of water to the capital each day during times of drought.

“The scheme was selected through a robust process, which assessed hundreds of options at a regional level and TDRA was consistently assessed as best value based on balancing cost, environmental and carbon impact, and water availability.

“We are confident that TDRA remains one of the best value options to deliver vital drought resilience for London. The TDRA project is an essential part of our agreed plan with the Government to secure water supplies for the future, helping businesses and schools to remain open, and daily life to go on as usual.”