Ofwat’s draft determination for investment by water companies over the next five years proposes that 21 infrastructure schemes in the programme will be funded by new competitive models that reduce the upfront burden on customers.
The reforms build on the regulated asset base model used to fund the £4.5bn Thames Tideway super sewer, which is now being commissioned.
According to Ofwat, the new approaches enable capital and operational cost savings as well as a reduction in financing costs, while maintaining quality.
In addition to these 21 large schemes Ofwat has a programme of 18 major projects ranging from reservoirs to water transfers and treatment works. These projects are set to attract around £26bn pounds of new investment to the sector over the next five to 15 years through innovative competitive delivery models. Third parties will compete to design, build and in some cases operate and maintain the infrastructure.
To qualify for these models, major projects are over £200m and distinct from the rest of the company networks.
This builds on the experience from the £4.5bn Thames Tideway super sewer, which is currently being commissioned. This is showing how the use of competitive models for delivery and innovation in finance arrangements helps deliver better outcomes for customers and the environment.
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