UK Introduces Highways Financing Bill: Lower Thames Crossing Project Valued at £10 Billion

en.Wedoany.com Reported - On 10 September, the UK government formally introduced the Highways (Financing) Bill to Parliament, with the Lower Thames Crossing set to become the first major road project to be supported under the legislation. The Bill proposes to establish a new licensing and charging regime for major road projects in England, introducing a Regulatory Asset Base (RAB) financing model that would enable licensed private entities to finance, build, operate and maintain projects, and to recover economically and efficiently incurred costs plus a reasonable return on investment through road charges.

The text of the Bill specifies that its scope includes authorising the imposition of tolls on trunk roads in England in exchange for the construction of the relevant road works, and also sets out the functions of licence holders, regulatory enforcement mechanisms, special administration arrangements, and arrangements for the collection and enforcement of existing road charges. The Office of Rail and Road (ORR) will take on the economic regulation role for the Lower Thames Crossing and is currently working with the government to develop the detailed regulatory framework.

The Lower Thames Crossing connects Kent, Thurrock and Essex, and will link the A2/M2 with the M25 motorway via two tunnels beneath the River Thames. Once completed, road capacity across the Thames east of London is expected to nearly double. Development consent was granted in March 2025, and preliminary works have now begun on both the north and south banks, including utility diversions, archaeological surveys, ground investigations and ecological protection preparatory works.

The UK government's Autumn 2025 Budget added £891 million in public funding to complete the government-funded portion of the project before it enters the private capital construction phase. The government subsequently designated RAB as the preferred financing model for the project, with a regulated private entity planned to take on the subsequent financing, construction, long-term operation and maintenance. The project's final commercial and financing arrangements will still require a full business case and regulatory framework to be completed before private investment comes in.

The government has previously made clear that the level of road charges has not yet been determined. Under the current RAB scheme, future charges will cover the economically efficient costs of the project's services and include a reasonable return on private capital, with an independent regulator responsible for reviewing charges, efficiency and service standards.