Plans for a Northern Line extension from Kennington to Battersea in South West London are gaining considerable momentum. Project developer Treasury Holdings UK, on behalf of site owners Real Estate Opportunities, is expected to put in a planning application for the associated 740,000 sq m of mixed use development at the Battersea Power Station site in the next few weeks.

T&TI understands that Treasury Holdings will also seek tenders for a RIBA Stage C Reference Design contract for the 3km tube extension at the same time.

A source close to the US$800M tube project told T&TI that the developer will pay close scrutiny to the individuals offered in bid responses and won’t accept a “B team” if top expertise, particularly in tunnelling engineering, has been assigned elsewhere.

Consultant Parson Brinckerhoff last year studied three possible routes for the link. The feasibility study, endorsed by London Underground, showed the project was feasible. Cost consultants Corderoy drew up cost estimates based on Q1 2008 prices. A direct route running from Kennington to Battersea was estimated to cost US$625M. A second route creating an additional station at Nine Elms was estimated at US$755M. A third route creating an interchange with Vauxhall station on the Victoria line was priced at US$1bn.

T&TI understands that the interchange with Vauxhall will prove unpopular with Transport for London (TfL) as the Victoria line is already running at capacity. The running favourite is a direct route between Battersea and Kennington with the option for later adding a station at Nine Elms.

Cross-party political backing was thrown behind the tube project earlier this year as Wandsworth and Lambeth Borough Councils, the Greater London Authority and TfL in June petitioned the Government to consider the extension for an innovative private funding mechanism.

TfL’s limited budgets means the extension will only be able to move forward on private funding. Treasury Holdings called in PricewaterhouseCoopers (PwC) to identify funding scenarios.

Development levies will be imposed on private developers by the Local Authority before consent for development is given. Development in the Nine Elms area would make significant contributions available.

Ticketing securitisation will allow Treasury Holdings to borrow against the future ticket sales of the extension.

Finally, Tax Incremental Financing (TIF) or Accelerated Development Zones (ADZ) is a novel method of raising funds already being employed in the US. The method borrows against the incremental revenues of the local authority or central government generated by the underlying development.

The UK government is currently evaluating the TIF/ADZ method with an eye to trailing it in the UK.

If all goes to plan, the extension will be completed in 2015/2016.