SCOTTISH civil engineering firms are braced for heavy cutbacks after utility Scottish Water accepted the Water Industry Commission's plans to limit spending over the next five years.
Scottish Water had asked for £3.4 billion to be spent in its submission to the Quality & Standards III spending programme between 2006 and 2010 but the WIC allocated just £2.1 billion in its final ruling.
The decision means that more than half of Scottish Water's planned upgrades will be cancelled or postponed.
Chairman Alan Alexander said: 'We originally costed the need for major work at 270 water treatment works. It is now agreed these objectives can be achieved by significant improvements at 115 works.
'Improvements in water quality at other water treatment works will be achieved in this period through maintenance and operational enhancements.' Scottish Water said it was working up plans for other improvement schemes to be considered by the regulator.
The Civil Engineering Contractors' Association's chief executive in Scotland, Alan Watt, said: 'The new regulatory period is upon us in April and Scottish Water now needs to review the size and scope of its works programme to meet the WIC's tough targets.
'This will inevitably cause a short-term dearth of work on the ground in a sector that has just spent two years gearing up to hit current work levels.' But CECA was relieved that Scottish Water had decided not to refer the WIC's target to the Competition Commission.
Mr Watt added: 'If the determination had been referred, we could have been looking at around a year of delays.' The work programme is being delivered by Scottish Water Solutions. This is Scottish Water in tandem with two consortia: UUGM, a team comprising United Utilities, Galliford Try and Morgan Est; and Stirling Water, featuring Thames Water, Gleeson, KBR and Alfred McAlpine.
These teams are responsible for 70 per cent of investment.