Ofwat has today recommended that four strategic regional water resource solutions pass through accelerated gate one - its first checkpoint.

The decisions follow a comprehensive assessment by the Regulators Alliance for Progressing Infrastructure Development (RAPID) and agreement to the recommendations across all three regulators that make up the alliance.

The proposed solutions are as follows:

Desalination (proposed by Southern): The desalination plant in Hampshire could provide up to 75 million litres of water per day and would be the largest seawater desalination system in the UK.

Water recycling (proposed by Southern): An alternative to desalination that could also provide up to 75 million litres of water per day.

West Country North Sources: (jointly proposed by Bristol Water, Wessex Water and Southern Water): A reservoir in Bristol Water’s area and transfer through Wessex Water’s area to Southern Water.

Raw water transfer from Portsmouth Water’s proposed Havant Thicket reservoir to Southern’s Otterbourne Water Treatment Works (proposed by Southern Water): This new proposal includes abstraction from the proposed reservoir, a new high-lift pumping station and around a 40km pipeline to Otterbourne Water Treatment Works.

All four solutions have passed the first checkpoint - however, in its assessment, RAPID raised concerns regarding the progress on key activities expected at this stage.

For desalination and water recycling, it found that some elements of the expenditure had not been efficient, and not all of it should be allowed.

Shortcomings in the completeness and quality of these two submissions also mean that it proposes to implement a delivery incentive penalty of 10% unless a number of remedial actions are completed as a priority.

Southern has also indicated that completion of its three proposed solutions is currently not expected until 2028 or later.

Without action to get the programme back on track, the end of 2027 timescale for delivery of alternative water resource (referred to in a Section 20 Agreement with the Environment Agency) will be missed - causing longer term environmental risk due to extended reliance on drought orders and permits as a means of topping up customers supplies.

Paul Hickey, Managing Director of RAPID said:

“Today marks a significant milestone supporting the collaboration which is happening across the sector to achieve both water resource resilience and wider public value. The innovative nature of RAPID has allowed three regulators to come together and agree these draft decisions.

“We were pleased to see that all the submissions were on time and that the RAPID regulators, together with Natural England, were able to conduct such a thorough and co-ordinated assessment. The draft decisions represent the first indication of whether the companies are on track in progressing work on the strategic resource options in a way that offers value to customers.

“While we have seen some encouraging signs of collaboration, companies need to continue to demonstrate that they can secure resilient water supplies and deliver benefits to customers, the environment and society as a whole.”

West Country North Sources will now move to Gate two of the standard gated process.

Companies and other interested parties have until 31 December 2020 to make their representations following the draft decisions. Ofwat will then publish its final decisions on 28 January 2021.

Click here to access Ofwat's individual draft decisions online