Lower Thames Crossing RAB model: financing structure and delivery risks for engineers
Reviewed by Tom Sullivan
First reported on The Construction Index
30 Second Briefing
The UK Treasury has confirmed that the £9bn Lower Thames Crossing will proceed on a regulated asset base (RAB) model, with an additional £891m of public funding allocated to complete pre-construction works before private finance takes over construction and operation. Investors are expected to draw regulated revenue from the existing tolled Dartford Crossing during the new crossing’s construction, with the new crossing itself also tolled, mirroring approaches used on Thames Tideway and Sizewell C to lower the cost of capital. Market engagement on the RAB structure will start in 2026, and it remains unclear whether future asset owners will retain National Highways’ current delivery teams – Bouygues/Murphy JV for the tunnels and Skanska and Balfour Beatty for the approach roads – or re-tender major packages.
Technical Brief
- Treasury confirmation ties the £9bn crossing to a regulated asset base (RAB) financing structure.
- RAB model guarantees investors a regulated return over the asset’s operational lifetime under economic oversight.
- Unlike traditional RABs, the structure is expected to allow revenue drawdown during construction.
- Dartford Crossing toll income is envisaged as the primary regulated revenue stream during build-out.
- The new Lower Thames Crossing itself will also be tolled once operational, creating a dual-revenue corridor.
- Formal market engagement on the RAB structure is scheduled to start in 2026, before main private financing.
- Future asset owners may either inherit or re-tender National Highways’ existing tunnel and approach-road delivery JVs.
Our Take
Using a regulated asset base (RAB) model for the £9bn Lower Thames Crossing brings road infrastructure into the same financing toolkit as Thames Tideway and Sizewell C, signalling that HM Treasury is prepared to push more demand‑risk onto users and investors rather than relying solely on conventional public funding.
For UK contractors such as Bouygues, Skanska and Balfour Beatty, a RAB structure typically means longer-duration, lower-margin but more bankable revenue streams, which can support higher gearing and justify investing in specialist tunnelling and civils plant for the crossing.
The timing of formal market engagement from 2026 aligns with calls in other UK infrastructure coverage, such as Amey’s submission to HM Treasury, for more predictable long-term pipelines, suggesting that National Highways is trying to de-risk procurement by locking in investor appetite well ahead of major construction spend.
Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.
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