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£3bn Thames Water alliance winners confirmed

Balfour Beatty, Costain and Skanska have been confirmed among the joint venture winners for Thames Water’s £3bn landmark alliance, as first revealed by Construction News a fortnight ago.

The firms will carry out works to Thames Water’s ageing water and sewerage networks between 2015 and 2025, including under the AMP6 framework.

The alliance is set to carry out between £2bn and £3bn of work. Thames Water’s investment programme for the five years from 2015 will be finalised following the 2014 water industry review of prices by the regulator Ofwat.

There is potential to extend contacts after this five-year period to 2025.


Thames Water’s AMP6 alliance is made up of two design-and-build consortia, a programme manager and a technology and innovation provider.

  • Design and build: Costain Veolia Water Atkins (CVA) and Skanska MWH Balfour Beatty (SMB)
  • Programme manager: MWH
  • Technology and innovation provider: IBM

Balfour Beatty said its contract is worth £1bn to £1.5bn, shared equally between the three partners.

Chief executive Andrew McNaughton said: “We‟re very pleased to be an integral part of Thames Water’s AMP6 cycle at a time when the company adopts a completely new approach to its capital investment.

“The pipes and pumps that keep our water system working are crucial, and we are delighted to be bringing our skills and experience to this important programme in water, one of our key economic infrastructure sectors.”

Costain chief executive Andrew Wyllie said: “We are delighted to have been selected by Thames Water to deliver this major AMP6 contract.

“The award is a consequence of our ability to work collaboratively, deliver sustainable innovative solutions to major infrastructure needs, and provide value for money.

“It also further reinforces Costain’s position as one of the leading UK engineering service providers in the water sector.”

Thames alliance marks ‘complete transformation’

Thames Water asset director Lawrence Gosden said the decision to deliver the AMP6 (2015 to 2020) investment programme using an alliance marked a “complete transformation” in the way the company delivers capital investment.

“The tender process started with an extensive consultation with our supply chain to form a delivery strategy with collaboration at its heart, and it ended with us joining forces with the some of the leading names in the industry,” he said.

“We have a significant amount of work to do upgrading our deteriorating infrastructure over the next 25 years and beyond, while keeping customers’ bills affordable. If we are to achieve this, a different approach is required.

“That is why we have formed an alliance to deliver our AMP6 programme. This represents a complete transformation in the way we carry out investment.

“Our focus will be on delivering value, as opposed to just cost-efficiency. We will take a long-term view, as well as making sure we meet out shorter-term goals.

“By forming this early, two years before the start of the next five-year regulatory period, we stand the best possible chance of delivering the safest, most sustainable and most innovative solutions – those which don’t necessarily involve simply pouring concrete.”

The alliance board will include representatives from Thames Water and from each member of the alliance. It follows a four-month procurement process.

Thames Water head of capital procurement Tim Coles said: “Rather than taking a purely commercial and technical approach, we have focused on behaviour by putting our people and our partners’ people through interviews, site visits and workshops.

“This process has reduced the procurement process from up to 18 months to four and has significantly lowered the cost of bidding for the bidders involved.”

Atkins chief executive officer Prof Uwe Krueger said: “This important addition to our strong portfolio of clients is further evidence of the strength of the UK water market and will help smooth the transition between the cyclical funding periods so that key skills and capabilities are retained within the sector.

“By combining a deep knowledge of the water industry with world-leading expertise in infrastructure design and programme management, Atkins and our joint venture and alliance partners will help Thames Water achieve the good value, innovative, sustainable and effective solutions it demands for its millions of customers.”

IBM will be using ‘Big Data’ analytics to provide “deep insight into existing business and service data”.

“As the water industry continues to transform, finding smarter ways to make operations more efficient while preparing for future growth is a major priority for companies today,” said IBM Europe vice-president for energy and utilities Graham Butler.

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