Super Sewer Boss Gets Big Pay Rise

London's Legacy: Super Sewer Boss Bags £2.5M Pay as Project Costs Swell

A significant boost in compensation for the head of London's "super sewer" project has ignited fresh debate over executive remuneration. The pay increase arrived at the same time the company responsible for the colossal infrastructure project announced that total costs had surged by another £100 million. Critics are questioning the substantial rewards, particularly as the project's funding comes directly from compulsory surcharges on the public's water payments. The controversy places a spotlight on the financial governance of what is among the United Kingdom's most complex and vital infrastructure upgrades in a generation.

A Controversial Pay Packet

As the chief executive responsible for the Thames Tideway Tunnel, Andy Mitchell received total pay of £2.5 million for the fiscal year ending in March 2025. This marks a £600,000 increase from his £1.9 million compensation the previous year. According to accounts from Bazalgette Tunnel Limited, the tunnel's builder, a major driver for this rise was a £500,000 boost to his "retention bonus," which reached £1.5 million. His package also included a fundamental salary amounting to £550,000, an additional bonus worth £423,000, alongside other benefits and payments into his pension. Matthew Duncan, the finance director, also saw his pay increase to £1.7 million from £1.3 million.

A Project of National Significance

An immense project, the Thames Tideway Tunnel is a 25-kilometre conduit running deep beneath London. Its primary purpose is to intercept huge volumes of untreated sewage that overflows from the city's Victorian-era network into the River Thames each year. For more than a century and a half, London relied on a system engineered for a much smaller population. This modern upgrade, now operational, is designed to protect the river's ecosystem, improve water quality, and safeguard public health for the next 120 years. The project represents a critical step in modernising the capital's essential services.

Echoes of the "Great Stink"

To grasp the project's importance, one must look back to the summer of 1858. During this period, a heatwave intensified the stench from the River Thames, which was effectively an open sewer, to an unbearable level. This event, famously known as the "Great Stink," paralysed London and even forced Parliament to halt its proceedings due to the appalling odour. The crisis was the culmination of a rapidly growing population and the adoption of flushing toilets, which overwhelmed the city's inadequate cesspit system. The public health disaster, linked to deadly cholera outbreaks, created the political will for radical change.

The Vision of a Victorian Engineer

To address the crisis, authorities tasked Sir Joseph Bazalgette, a brilliant civil engineer, with designing a comprehensive solution. His visionary plan involved constructing a vast network of intercepting sewers running parallel to the Thames. These brick-lined tunnels, an engineering marvel of their time, were designed to capture waste and divert it eastwards, away from central London, for treatment before its release. Bazalgette's system, largely completed by 1875, was so well-engineered that it has served London for over 150 years, virtually eradicating cholera and cleaning the river.

London’s Modern Pollution Problem

While Bazalgette's system was revolutionary, it was built for a city of four million people. The city's population has grown to over three times its former size, placing immense strain on the ageing infrastructure. The original design included 57 combined sewer overflows (CSOs) as a failsafe to prevent sewage from flooding homes during heavy rain. However, with the modern population, these CSOs discharged a mixture of rainwater and untreated sewage into the Thames more than 50 times a year. Before the new tunnel, these spills amounted to an average of 39 million tonnes of pollution annually, devastating the river's ecology.

Image Credit - The Telegraph

Funding From the Public Purse

The financing model for this multi-billion-pound solution has been a key point of public interest. The project is not funded by general taxation but through compulsory surcharges added to the bills of Thames Water customers. This surcharge is expected to add approximately £25 per year to each household's bill over several decades. The direct link between customer payments and project funding is why the extent of executive rewards has attracted such intense scrutiny. Every pound spent on salaries and bonuses is a pound collected from the public to pay for this essential upgrade.

Delays and Rising Costs

The project's financial journey has been lengthy and complex. The overall expenditure was initially projected at around £3.5 billion. However, the final figure has since climbed to £5 billion. Construction, which began in 2016, faced significant challenges, including a nine-month delay caused by the COVID-19 pandemic, which added approximately £233 million to the budget. The announcement of a further £100 million cost overrun, taking the total from £4.5 billion last year to £4.6 billion reported by the company, has only intensified concerns over financial management. However, some reports cite a final cost of £5 billion.

The Company’s Defence

In the face of this criticism, Tideway, the company delivering the project, defends its remuneration practices. A spokesperson described the tunnel as a piece of infrastructure of global standing and among the nation's most intricate. They argued that the project was completed inside the initial cost projections provided to bill payers. The company stated that its pay structure considers the immense difficulty of the engineering and takes into account performance against targets for its timeline, budget, safety record, and sustainability aims. They attribute the recent pay increase mainly to a long-term bonus for retention that promoted consistent leadership and the triumphant completion of this vital project.

A World-Class Engineering Feat

The intricacy involved in the Thames Tideway Tunnel cannot be overstated. Construction involved tunnelling at depths of up to 70 metres below London, navigating a labyrinth of existing underground rail lines and utilities. To achieve this, engineers deployed massive tunnel boring machines (TBMs) to excavate the 25-kilometre main tunnel. The project required 24 construction sites across the capital. Now fully connected and operational, the system has a combined capacity of 1.6 million cubic metres, enough to hold the equivalent of 600 Olympic-sized swimming pools of stormwater and sewage.

Meet the Tunnelling Machines

In a move to connect the project with the communities it would serve, Tideway named its six giant TBMs after inspiring women from London's history. The names were chosen through a public vote. The machines included Selina, named after Selina Fox, a doctor who founded the Bermondsey Medical Mission; Ursula, after Audrey 'Ursula' Smith, a cryobiologist; and Rachel, named for Rachel Parsons, a pioneering engineer and co-founder of the Women's Engineering Society. These powerful machines worked tirelessly deep beneath the city, each playing a crucial role in excavating a different section of the tunnel before being retired.

The Man at the Helm

Andy Mitchell's career is rooted in delivering large-scale, complex infrastructure. Before taking his leadership position at Tideway, he managed a portfolio of major projects. His experience includes working on the construction of Hong Kong's international airport and leading significant London rail projects such as the Thameslink programme and the Elizabeth line. This extensive track record in managing multi-billion-pound ventures provides context for his appointment to lead the super sewer project. His supporters would argue that such expertise commands a high salary, essential for ensuring a project of this scale succeeds.

A Culture of Excessive Pay?

Critics, however, view the situation differently. The High Pay Centre, a think tank that scrutinises executive remuneration, argues that the UK has a troubling culture of exceptionally large compensation at the top. Luke Hildyard, the centre's director, stated that when a tiny elite captures such a large portion of the economy's created wealth, improving the standard of living for the general population becomes more difficult. Research from the centre highlights a widening gap, with the median FTSE 100 CEO now paid over 100 times the median UK full-time worker.

Public Service, Private Rewards

Hildyard extended his critique to roles in the quasi-public sphere, such as this one. He acknowledged that overseeing Tideway is a demanding task but contended that the position also offers substantial status and non-monetary benefits. The implication is that such extravagant pay awards may not be necessary to attract a proficient manager for a venture funded by the public. This raises a fundamental question about value for money, especially when the service is a monopoly and the costs are passed directly to consumers who have no alternative provider.

The Water Industry Under Fire

The controversy surrounding Tideway's executive pay does not exist in a vacuum. It is part of a much broader wave of public anger directed at the UK water industry. Widespread disgust over the continued leaking of raw sewage entering the waterways and coastal areas of Britain has prompted intense examination of the sector's performance and governance. The industry is structured as a collection of privately-held regional monopolies, a system that has been in place for over three decades. This structure, combined with environmental failures, has fuelled calls for radical reform and greater accountability.

Image Credit - City AM

Privatised Monopolies and Public Anger

The perceived failures of water companies have led to government action. Recently, the regulator Ofwat was granted new powers under the Water (Special Measures) Act to ban bonuses for executives at firms that fail to meet environmental and customer service standards. For the 2024-25 financial year, six companies, including Thames Water, were banned from paying bonuses to their chief executives due to poor performance. This regulatory crackdown reflects a growing political consensus that the balance between shareholder profit and public service needs to be recalibrated across the entire sector.

Investor and Ownership Structure

Bazalgette Tunnel Limited, which trades as Tideway, is not a publicly listed company. It is owned by a consortium of large, long-term investors. These include the German financial services giant Allianz, and infrastructure investment specialists Amber Infrastructure and Dalmore Capital. A significant portion of the investment comes from UK pension funds, meaning millions of British pensioners have an indirect financial stake in the project's success. This complex ownership structure was designed to finance major national infrastructure with private capital, a key component of government strategy.

The Environmental Payoff

Despite the financial controversies, the environmental benefits of the super sewer are becoming clear. Since becoming operational, the tunnel has already prevented enormous volumes of pollution from contaminating the River Thames. It is designed to reduce overflows by 95% in a typical year, capturing the polluted "first flush" of stormwater that follows dry periods. This dramatic reduction in pollution is expected to have a transformative effect on the river's ecosystem. It will allow aquatic wildlife to flourish, reduce sewage-related litter, and make the river safer and more attractive for recreational activities.

A Cleaner Future for the Thames

The long-term vision for the Thames is one of a healthier, thriving waterway. The completion of the London Tideway Improvements scheme, of which the super sewer is the final and largest part, promises a secure future for the river's ecology. It will enhance the Thames's role as a nursery for juvenile fish and a habitat for hundreds of invertebrate species. Surveys have already shown that the connected Lee Tunnel has improved water quality in its local area, with 14 species of fish now present in the previously polluted Channelsea River, a positive indicator for the wider Thames.

A Necessary Cost for a Vital Legacy?

A complex balance sheet is presented by the Thames Tideway Tunnel, showing various costs and benefits. On one side, there are significant cost overruns and executive pay packages that critics deem excessive for a publicly funded utility. On the other, there is the triumphant completion of a monumental piece of engineering that corrects a centuries-old environmental problem and provides a vital asset for London's future. The project stands as both a testament to modern engineering capability and a flashpoint in the ongoing debate about corporate governance, public funding, and the fair distribution of rewards.