Dŵr Cymru Cyfyngedig (Welsh Water) has taken the next step in the process of using Ofwat’s Direct Procurement for Customers to deliver a £100 million-plus construction scheme to provide long-term water supply resilience to Cardiff, Newport and several smaller towns located within the Merthyr Valley.

The water company is planning to use a Competitively Appointed Provider (CAP) to deliver the Cwm Taf Water Supply Strategy project which will be procured using Ofwat’s DPC approach. Via the DPC process water companies can open up the financing, design,construction and operation of large projects of £100 million-plus to competition.

Welsh Water is now looking to test market interest for the design, build and financing elements of the project.

Subject to regulatory approval, the utility is looking to procure a CAP to provide the financing and construction of a Water Treatment Works capable of processing an average output 160Ml/day & maximum output 225Ml/day together with construction of a treated water storage tank (150Ml) to supply safe drinking water to over 600,000 people across the DCC South East Wales Conjunctive Use System (SEWCUS) network as part of a revised network configuration which the CAP will be required to deliver as part of the project

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Pontsticill Water Treatment Works - Photo: Andy Dingley Wikimedia 

The scheme involves the replacement of three existing water treatment works (Pontsticill, Llwyn-Onn and Cantref) with a new facility at Merthyr Tydfil, with the possibility of decommissioning a further two assets (Carno and Nantybwch) at a later stage.

Relative to Welsh Water’s other WTWs, Pontsticill, Llwynon and Cantref WTWs experience approximately three times the rate of failure.

Welsh Water is now conducting pre-market engagement to gauge capability and interest in the market to assist in its decision making.

The water company is inviting organisations to contact it by 24^th May 2021 who have with experience in either:

• the financing of construction schemes for DPC, PFI or PPP projects
• construction of water treatment works with associated storage tank and water mains laying capability

Interested organisations will then need to complete a questionnaire ahead of attending a market engagement event that is currently being planned for 25th May 2021, which will be held virtually.

Anticipated date for the issue of a formal Contract Notice for tenders is July 2022.  The expectation is that the competitively appointed provider would be procured in the 2020-25 price control period and the contract would cover the construction of the scheme and its operation for a period no less than 20 years.

Click here to access the Prior Information Notice.

Want to know more about winning new business with the water companies in AMP7 and AMP8 between now and 2030?

Welsh Water has already developed outline business plans for AMP8 and AMP9 (to 2035), including a preliminary financial plan to 2030 which proposes an AMP8 investment programme of some £2.3 billion.

All of this information is set out in our flagship report Complete AMP7 Contracts Tier 1 Alliances and Tier 1 Contractors April 2020 - 2025. The report contains details of the companies, the alliances, the contracts they’re already working on in the UK water sector, together with hundreds of key named contacts. Click here for more information and details of how to order.