Thames Water Utilities

Procurement policy
Following publication of its forward works programme in the EU's Official Journal, Thames Water has approved 24 contractors and 10 consultants to help it deliver its capital works programme. These alliance contracts will run for three years, with an option to extend for two. From this list, three alliances were formed with Gleeson, Laing and Costain for capital process schemes and will cover all clean and dirty water treatment projects. Three alliances were formed for network projects, also for clean and dirty water, with Murphy, Morrison and Barhale/Subterra. Schemes involved are generally below £20m for process projects and under £10m for network schemes. Thames Water is also using contractors from its approved list for large, single alliance contracts, for example process projects valued at more than £20m.

Current and future projects
Investment by Thames Water Utilities increased sharply in 2001/02 as the company made up for the shortfall in the previous year. The company's five-year investment programme, covering the period April 2000 to March 2005, was estimated by Ofwat at an average annual sum of £435m (£2.175bn in total). In arriving at this figure, Ofwat assumed that the company would be able to achieve efficiencies in its capital programme. The efficiency target is 4-5% on underground assets (less than that for other companies), and 4-7% on above ground assets, which is the average for the industry. Although the company's actual investment in the first year of the five-year period was more than £100m below the planned level, it was in line with the plan in the second year, which implies that investment need rise only modestly over the next three years in order to meet Ofwat's assumed requirements.

Thames Water's investment is presently split between water services (£234m) and sewerage services (£195m). Water investment is dominated by investment in distribution assets (£155m), while a large part of sewerage investment goes to treatment plants (£116m).

Essential information
Major projects awarded recently include Reading Sewage treatment works (£70m), Perry Oaks Sludge treatment (£60m) and High Wycombe Sewage treatment (£22m).

Thames Water continues to pursue new business in the UK and overseas. Among recent successes, the company has been named preferred bidder to manage the water and wastewater systems of the city of Stockton in California. This contract is valued at £45m and will stretch over 20 years.