(Adds detail on financing)
By Claire Ruckin and Freya Berry
LONDON, June 8 (Reuters) - The decision on which of two parties will be allowed to invest in the 4.2 billion pound ($6.4 billion) Thames Tideway Tunnel has been delayed by several weeks, according to two sources familiar with the matter.
The decision on London's new so-called "super-sewer", which had been expected on Monday, has been delayed for around three weeks, one of the sources said. However, no third bidder has entered the process, the other person said. The sources declined to be named since the matter is private.
Two consortia are vying to win the deal. Allianz, Amber Infrastructure and fund manager Dalmore are up against Universities Superannuation Scheme, Borealis, M&G's Infracapital unit, and Innisfree.
Thames Tideway Tunnel declined to comment.
Final bids for the process, which is being run by UBS , were submitted around mid-May.
"There are some clarifications and tweaks to be made," the second source said.
UBS had no immediate comment.
The process to provide investment for the Thames Tideway Tunnel was formally launched in spring 2014, with construction work due to begin in 2016. The 7.2 metre-wide tunnel is aimed at reducing the tens of millions of tonnes of sewage that overflow into London's River Thames every year.
Bankers are working on different debt packages to back a deal, varying between 1 billion pounds and around 2.8 billion pounds, depending on which consortium wins the process, banking sources said.
A 1-billion-pound financing would consist of a large 10-year revolving credit facility which will be drawn down to fund capital expenditure activity, before being refinanced to the original level, the sources said.
Loans drawn under the revolver could be refinanced through the bond market. Funding the deal in this way would save the cost of paying a large commitment fee on debt which is not needed straight away, the sources added.
A larger financing package could fund the project upfront and have a longer tenor, one of the banking sources said.
The size of the financing could also depend on the level of debt the European Investment Bank provides.
$1 = 0.6551 pounds Reporting by Claire Ruckin and Freya Berry; Editing by Pamela Barbaglia and Pravin Char