£1.6 billion investment in water infrastructure – how it will result in new public procurement and tendering opportunities

£1.6 billion investment in water infrastructure – how it will result in new public procurement and tendering opportunities

Although it does not receive as much attention as energy stability or global food supply chains, water management is equally as critical to maintaining the overall health and infrastructure of British public utilities. Despite its status as a water-secure country with little threat of scarcity, the UK’s water supply has become increasingly unstable in recent years, particularly due to the increased frequency of droughts attributable to climate change. For example, 2022 saw the driest July since 1885, leading to a hosepipe ban for London and the Thames Valley, instituted by Thames Water. A 2021 speech from Environment Agency Chair Emma Howard Boyd indicated that, if current levels of water consumption were to continue, the British public would need an additional 3,435 million litres per day while simultaneously having 10–15% less water in England.

There are also significant issues with pollution and contamination of public water areas. A 2022 analysis from the Liberal Democrat Party discovered that water companies across the UK dumped raw sewage at more than 40 British seaside resorts and other designated public swimming spots for a total of 160,000 hours over the calendar year. In response to this analysis and to expedite an overall increase in water quality and infrastructure, the national government set out a 25-year plan in January 2023, complete with targets for reducing leakage and wastage.

Scope of investment programme

As the first step of this ambitious plan, DEFRA the Water Services Regulation Authority (more commonly referred to as Ofwat) announced a suite of projects on national water infrastructure and management, with a total value exceeding £1.6 billion, lasting between 2023 and 2025. Projects include the following:

Purchasing authority Project description Total value
United Utilities Reducing polluting discharges and spills within the Lake District and Lake Windemere £800 million
Yorkshire Water Improving wastewater treatment infrastructure in Ilkley and improving bathing water quality of the River Wharfe £67 million
South West Water Upgrading of water treatment assets and storage to reduce consumer charges in Cornwall and Devon £70 million
Severn Trent Installation of smart water meters and the modification of an existing reservoir in Warwickshire to increase overall capacity £70 million
Anglian Water Accelerating regional storm overflow reduction plans across the East of England £27 million

To supplement the funding streams for infrastructure, further initiatives to be implemented by the end of 2023 consist of:

  • Improvements at 14 wastewater treatment works to reduce nutrient and phosphorus pollution, for a total value of £160 million.
  • The creation of a new Water Restoration Fund which will utilise money from water company fines and penalties to support localised projects, such as restoration of habitats and re-meandering rivers.
  • Doubling the total funding of the Slurry Infrastructure Grant to £34 million, enabling farmers to reduce water pollution from agrochemicals, organic matter and sediment.

Overall, the project workstreams will cover a broad variety of sectors and will require a sequential programme of work and multiple teams to complete the ambitious objectives set out by Ofwat, DEFRA and other central government authorities.

Potential tendering opportunities

With such large sums allocated to utility companies, SMEs and other water management companies will undoubtedly benefit from increased tender opportunities via contracted and subcontracted works. Although water suppliers such as United Utilities and Yorkshire Water are technically private entities, they are subject to The Public Contract Regulations 2015 and consequently advertise opportunities on the central government’s Find a Tender service when procuring supply chain partners.

The tendering process can be rigorous, time-consuming, and littered with complex industry-specific terminology. If you are unsure of how to proceed with bid writing or want to ensure you submit the most competitive tender possible, various companies like Executive Compass offer a range of bid management services suited to your organisation’s needs.

Based on the project outlines and scope of works included in the funding packages, possible tendered services could comprise:

  • Hazardous waste management and disposal for chemicals used for water treatment, grit and refuse waste found within/around public waters.
  • Sewage sludge and slurry management inclusive of treatment, recycling and environmentally friendly disposal
  • Supply of water management parts, such as generators and actuators for treatment applications and distributors
  • Viral and bacterial testing of local water supplies, such as the monitoring and testing of legionella
  • Increasing flood resilience for residential and commercial properties in at-risk areas near bodies of water.

Overall, the investment will stimulate economic activity, foster innovation, and enhance water infrastructure capabilities. It will also present opportunities for businesses to engage with public entities and contribute to the improvement of water supply, treatment, and management systems through effective procurement and tendering processes.