The Regulators’ Alliance for Progressing Infrastructure Development (RAPID) has published its draft decision proposing that the South East Strategic Reservoir Option (SESRO) solution should pass RAPID gate three, a significant milestone of the RAPID gated process indicating the project has reached an advanced level of maturity.

Image: Artitist's impression SESRO reservoir

A partnership between Ofwat, the Environment Agency and the Drinking Water Inspectorate, RAPID oversees a multi-stage gated process for the development of large-scalewater infrastructure projects.

The decision would unlock £100 million in funding, enabling the solution to continue further refinement before seeking planning permission through a Development Consent Order (DCO) application, which is expected to be submitted by November next year. The draft decision is now out for public consultation, which closes on 29 January 2026.The SESRO Gate three submission included an estimated cost of between £5.5-7.5 billion capex.

The RAPID gate three draft decision

The South East of England is estimated to face a water shortfall of more than two billion litres per day by 2055. This scheme, being jointly developed by Thames Water, Southern Water and Affinity Water, is proposed to supply 271 million litres per day, alongside a step-change in leakage reduction and demand management.

Key reasons for proposing to approve that the scheme passes to RAPID gate four include:

• Assessment that the £65.44m allowance for RAPID gate three development activities was spent efficiently – ensuring value for money for customers;
• The depth of evidence provided regarding the programme and planning, risks and issues, and the procurement and planning route strategy for the scheme, which was rated good overall;
• The clear benefits of proceeding with further development and enabling work, including design development, finalising the groundwater flood risk mitigation and drainage solution, and developing the Preliminary Environmental Information Report (PEIR), which the RAPID gate four funding will be used for. This is essential for continuing to develop the scheme on a timeline so it can be construction ready by 2029 (and operational from 2040).

In some areas where the submission fell short of expectations, RAPID has outlined priority actions which must now be urgently addressed. This is to ensure that the development work on the scheme stays on track and that customer money is spent appropriately.

The draft decision notes that the SESRO Gate three submission did not present evidence concluding that SESRO remains best value in the context of statutory planning documents and alternative solutions despite the increase in cost (estimated at between £5.5-7.5 billion capex) presented in the submission.

The three solution owners have been given two priority actions to address this, including being required to use the statutory water resources planning process to update their best value decision making in the light of SESRO’s relevant cost changes – by 30 June 2026. This must be completed through the statutory water resources planning process, where the question of best value is assessed, not the RAPID gated process.

Paul Hickey, Managing Director, RAPID, said:

“With a forecast water shortfall of over two billion litres per day in the South East of England by 2055, major infrastructure projects like SESRO will be critical for securing our future water supply.

“Maintaining momentum around this scheme is imperative so it can be construction ready by 2029. Releasing the next round of funding will allow the next phase of development and enabling work to happen without delay.”

“We welcome representations on our draft decision to ensure we are considering all options to mitigate risks and maximise the scheme’s benefits.”

The need for action on water scarcity

England and Wales are forecast to have a shortfall in drinking water supply of around five billion litres per day by 2055. This is due to a range of factors including reductions in abstraction from rivers and streams to protect our natural environment, pressures linked to climate change and population growth. This shortfall needs to be met through a combination of demand reduction, addressing leakage, and new supply-side water infrastructure, such as this solution.

Background to the scheme

The South East Strategic Reservoir Option (SESRO) is a non-impounding, fully bunded raw water storage option in the upper catchment of the River Thames. The project is being developed near Abingdon in Oxfordshire, with the aim of delivering a new reservoir to store water abstracted during periods of high flow in the River Thames for use during periods of low river flow or high demand for water. The resource from SESRO is proposed to supply up to 15 million customers from Thames Water, Southern Water and Affinity Water.