Water, water, everywhere – and all of it the height of fashion, whether in a Titchmarshed garden or a comeback canal. Victoria Madine investigates one source of this new wave
Twenty years ago, few would have guessed that British Waterways, the public body that cares for more than 2000 miles of the UK's canals and rivers, would become a substantial construction client – or a partner in lucrative property deals. Waterways were considered a relic of the 18th century – a defunct transportation system that was either ignored or built over.

But over the past decade, canals have come back into Britain's urban and rural regeneration plans and on to property developers' menu of desirable sites. In the late 1980s, as part of a trend towards waterside living, canal sites began to attract a 15% premium. That trend was crystallised by Birmingham's successful Brindleyplace development, which is criss-crossed by a canal network. In 2000, the government recognised that canals were a "catalyst for urban and rural regeneration", and increased its funding of repair and maintenance work.

One of the figures behind the renaissance of the waterways is Bill Schagel, a Scot with a civil engineering background who is technical director at British Waterways. His plans for regeneration are about to go into overdrive: over the next five to 10 years, more than £300m is to be invested in nine canal restorations and new waterways (see box). The proposals cover 100 miles of waterways and even include proposals for Britain's first new canal in more than 100 years.

The programme is ambitious, but forms only the starting point of British Waterway's vision for the future. The group wants to use the restorations as a launch pad for wider regeneration projects that will be led by joint-venture companies set up by British Waterways.

Schagel stresses that the plans are a continuation of his outfit's renewal programme – £2bn has been invested on the waterways in the past 10 years and 220 miles of canals are due to be opened this year after the completion of seven major restorations projects, including the Falkirk Wheel in Scotland.

To get this programme rolling, Schagel and his team need partners. British Waterways provides some of the income through its commercial businesses and English Heritage, the Lottery Fund and the Waterways Trust, a charitable organisation, also provide support. But British Waterways is also looking to form partnerships with developers from the private sector.

Canal restoration, Schagel says, should be considered as part of a broader and more integrated approach. What is being increasingly well understood is that waterways reflect and amplify their environments. As Schagel put it: "They magnify an area's prosperity – and likewise magnify a place's neglect." He is looking for high-quality contractors and consultants to "create the kind of excitement" that will draw people and investors to waterways.

The development model here is the Falkirk Wheel, which has used imaginative engineering to raise the profile of canals in Scotland. "We envisage similar special projects in the future – they could well be a result of one of the new restoration projects. For example, the Bedford and Milton Keynes canal will require a "boat lift" to tackle a hill – that's a real challenge," he says.

It's obvious that Schagel is passionate about innovative design. "We are not looking for pastiche. Buildings should create a new sense of space. We are looking for innovation and excitement. One of our designers has a concept for a glass bridge, which is very exciting. We just need to find the right context."

We are looking for innovation and excitement. One of our designers has a concept for a glass bridge. We just need to find the right context

British Waterways will advertise the restoration projects to contractors and developers through the European Union's Official Journal and is likely to procure on a design-and-build basis. Schagel says the group likes to keep control over a project's development and the time-plan and funding arrangements. "We are also experienced at dealing with statutory process for procuring large public works," he adds.

So does Schagel have any frustrations about his dealings with contractors? "When we were procuring the Falkirk Wheel, we came up with an exemplar design. We said this is our idea – can you do better? The contractors found it difficult to break out of the initial concept. They stuck to it – and costed and estimated it. So we at least had a good idea of the project's cost. Post-tender, the two shortlisted contractors started to do much better and, in the end, Morrison won." The message to contractors is: listen carefully to the client's demands and use your imagination.

Aside from the restoration projects, British Waterways spends £60m, all public funds, on its maintenance programme. Some small contracting jobs are advertised on Achilles, the government's tender database, but most work is done by three contractors on a partnering basis. Morrison, Galliford Try and Dew Construction are the firms in question, although those contracts are being renegotiated and a fourth partnering place is up for grabs. "Because of the increase in our maintenance work since the last comprehensive spending review allocated us more funds, we are looking for another partner – and the new contracts will last for five years," says Schagel.

He believes in the partnering process because it encourages contractors to reinvest. "We cost each element of work,'' he explains. "If the contractor can bring about a cheaper result then we share the saving – we share the pain and gain."

After its involvement in large regeneration schemes – such as the commercial developments at Paddington Central and Paddington Basin, and the residential schemes at Brentford Lock in Greater London and Britannia Basin in Manchester – British Waterways is looking to set up more joint-venture companies with the private developers. Last December, the group created its largest property public–private partnership so far with Amec Developments and Igloo Regeneration Fund, which will develop 10 canalside sites. The list of sites will be revealed late this year, but there has already been considerable speculation in the local press that the proposed £1.4bn mixed-use development at Nottingham Riverside (see box) will be on it.

Schagel says he envisages similar joint-venture companies being set up in the future and a growing list of target development sites. "A new joint venture may come about as a result of one of the restoration projects. We provide the corridor of confidence – places where people want to be – and investment follows," he says.

Schagel says before a project gets near lift-off it first needs commitment from local people. "You've got to build enthusiasm – a momentum for regeneration projects. We then provide that vision to the developer. Without inspiration nothing gets done." It is these large investments that will help finance the future maintenance of waterways, Schagel stresses. "We're thinking about 200 years down the line. We've moved up a gear in our regeneration programme, but this is still just the beginning."

Going with the flow: nine canal restoration projects to brighten up urban and rural landscapes

1 Bedford & Milton Keynes Waterway: The first complete new canal scheme in Britain for more than 100 years. This would link the Grand Union Canal in Milton Keynes to the Great River Ouse in Bedford. Up to £150m could be invested and a feasibility study is under way. 2 Bow Back Rivers: A 3.5-mile system of tidal and semi-tidal waterways that feeds into the River Lee Navigation in East London. British Waterways is proposing a 1.5-mile canal extension. The feasibility study is to be completed by this summer. 3 Cotswolds Canals: If restored, the 29-mile Thames & Severn Canal and the eight-mile Stroudwater Navigation would stretch from Stroud to Lechlade in Gloucestershire. A study published last July indicated that the £82m project would create 1400 construction jobs. 4 Droitwich Canals: There are plans worth £8.5m to reopen 7.5 miles of waterway and construct a two-acre canalside site and marina. The restoration of the Droitwich Barge Canal and the Droitwich Junction Canal will relink the River Severn and the Worcester & Birmingham Canal. 5 Foxton Inclined Plane: British Waterways, along with its local partners, is working on a £9m redevelopment plan for the grade II-listed staircase of 10 locks, designed to haul boats up the changing levels on the Leicester Line of the Grand Union Canal. The plans also includes development of buildings at the bottom of the lock. 6 Leeds & Liverpool Canal: Plans for the creation of a 1.75-mile canal connecting Liverpool docks with the end of the Leeds & Liverpool Canal. There may also be a half-mile canal built at Pier Head, which would create a waterfront in Liverpool. About £15m could be invested. 7 Manchester Bolton & Bury Canal: A two-phase £32m restoration programme to reconnect Bury and Bolton to the River Irwell at Salford. The scheme may include the creation of a new visitor centre, and could be started next year. 8 Montgomery Canal: £35m restoration of the Montgomery Canal to Refail, south of Welshpool. The canal is a magnet for wildlife and has been declared a site of special scientific interest. 9 The Northern Reaches of the Lancaster Canal: More than £30m is needed to restore 14 miles of the canal. Almost all the structures of this, England’s most northerly canal, are grade II-listed.

On the waterfront: Nottingham revitalises its canals with £1bn restoration scheme

Nottingham Riverside is the largest regeneration project that British Waterways is in the process of developing along with a host of private and public sector partners, which together make up the Nottingham Waterside consortium. Covering 100 ha, the site earmarked for over £1bn in investment nestles on the north bank of the River Trent between the Nottingham-Beeston canal and the Racecourse at Colwich. Presently the site is a bleak, sprawling industrial site and is also home to second division Notts County Football Club. Little is made of its canal and riverside location. Last March, designer consultant EDAW came up with a masterplan to ”reconnect“ the area with Nottingham city and use the waterfronts. The project is expected to take 10 years. The plan includes a major canalside business development, alongside housing and leisure developments in a newly formed canal basin. Open space will link the canal basin to a new riverside plaza, laced by footpaths and cycleways. More than 4000 homes will make up the Riverside urban quarter and new bridges for cars and people will also be created for the canal and river. Nottingham Waterside is in the process of preparing development briefs with the council.