Ofwat has designated United Utilities’ Haweswater Aqueduct Resilience Programme as a Direct Procurement for Customers (DPC) Delivered Project.
The water sector regulator introduced a new delivery model – Direct Procurement for Customers (DPC) – at the 2019 Price Review (PR19)to introduce greater competition into the delivery, financing, ownership, and operations of large infrastructure projects.
The approach, whereby a Competitively Appointed Provider (the CAP) may be appointed to design, build, finance, operate and maintain the relevant infrastructure, requires companies to put out to competitive tender large infrastructure projects where delivery by a third party is likely to offer better value for money for customers.
Originally constructed in the 1930s-1950s, sections of the current asset are now approaching the end of their asset life and pose a significant risk to water quality and loss of supply to customers in Cumbria, Lancashire, and Greater Manchester.
At PR19, United Utilities Water requested funding for the Haweswater Aqueduct Resilience Programme, which will comprise the replacement of six tunnel sections of the existing Haweswater Aqueduct, connections to existing multiline siphons between the tunnel sections and associated facilities. It also includes the commissioning and ongoing maintenance of those works for a period of approximately 25 years after completion.
DPC requires water companies to consider the delivery of large projects against the following three eligibility criteria:
- Size (approximately £100 million or more whole life totex);
- Discreteness of the project; and
- Value for money for customers.
United Utilities’ Haweswater Aqueduct Resilience Programme (formerly the Manchester and Pennines Resilience scheme) is one of three projects are currently being developed for delivery via DPC.
At PR19, Ofwat advised companies to use a threshold of £100 million whole life totex to identify projects that may be suitable for DPC - while not a hard threshold, the value of the total Haweswater Aqueduct Resilience Programme met this threshold.
Ofwat allowed £57 million at PR19 for United Utilities to design the project and to put it out to tender.
Click here to download Ofwat’s designation notice
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