Thames Water announced that the projected costs for a new reservoir in Oxfordshire have surged from £2.2 billion to between £5.5 billion and £7.5 billion due to updated assessments. This cost escalation may lead to significant increases in water bills for its 16 million customers in London and the south-east, who already face a 35% hike over the next five years. The government plans to build nine major reservoirs to meet the rising water demand, estimating an extra 1 billion litres of water needed daily by 2050, yet regulators view that Thames Water cannot reduce leaks to handle this demand.
Thames Water's new reservoir in Oxfordshire could cost over three times the original budget, raising the potential total cost to between £5.5 billion and £7.5 billion.
The estimated construction costs escalated from £2.2 billion to between £5.5 billion and £7.5 billion after further tests were conducted on the ground and waterways.
About half the reservoir costs will be absorbed by Thames Water's 16 million customers, facing a 35% bill increase over five years.
Regulators acknowledge that Thames Water cannot effectively reduce leaks or redirect watercourses to address the projected increase of 1 billion litres of water usage daily by 2050.
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