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First large water outsourcing contracts awarded

Welsh Water is the first UK water company to outsource a major part of its business. The operations and maintenance of the company’s water and sewage services has gone to United Utilities under a four-year £450M (US$675M) agreement, and London-based Thames Water has taken over customer services under a £66M (US$99M) agreement. The two contracts commenced on 1 April 2000.

Welsh Water’s previous attempt to award these contracts was blocked when another water company complained that the direct agreement, which Western Power Distribution had proposed on acquiring Hyder (the owner of Welsh Water), did not comply with European Union procurement legislation.

Jim Illidge, assets and quality director who led the procurement process for Welsh Water, said it was ‘hard work but a real learning experience’ for everyone involved.

Terry Povall, a partner at procurement advisor EC Harris, said: ‘It was an achievement to reach a successful conclusion to this unique procurement process within the programme, while ensuring that the tender process was comprehensive, fair and rigorous.

‘Welsh Water is to be congratulated on this industry first.’