Scottish Water announces £1.8 billion investment

Scottish Water has announced a £1.8 billion pounds capital investment programme to upgrade the country's public water infrastructure.

Sept. 5, 2003 -- Scottish Water has announced a £1.8 billion pounds capital investment programme to upgrade the country's public water infrastructure.

Environment and Rural Development Minister Ross Finnie said:

"I welcome this announcement which is the biggest ever water industry investment programme in Scotland.

"It will bring significant benefits to people of Scotland by improving the quality of drinking water and cleaning up Scotland's coastal waters and rivers."

The investment will be spread over the period 2002-2006. To date, a total of £400 million of work has already been undertaken on a range of projects.

Over the next two and half years Scottish Water plans to commission 1,500 individual projects across Scotland, including the Katrine Water Project.

This will include upgrading and, in some cases, building 440 water treatment works, 490 wastewater treatment works, and carrying out water distribution and sewer renewal throughout the whole of Scotland.

Scottish Water reviewed the approaches to investment operated by the previous water authorities and concluded that they would not deliver the capital investment programme to the challenging efficiency targets Ministers have set.

Consequently, Scottish Water has set up a new investment delivery arrangement which is designed to harness private sector expertise to secure more cost-efficient and timely investment.

Mr Finnie, commenting on the establishment of Scottish Water Solutions Ltd (Scottish Water's asset delivery partnership), said:

"The establishment of this new venture will help Scottish Water to deliver the much needed environmental and drinking water improvements required in Scotland, and at substantially better value for money. I welcome this initiative from Scottish Water and its partners."

Ministers consulted on the investment priorities required in the Scottish water industry to improve water quality standards and achieve the environmental standards required by EC driven legislation.

This process drew on input from the Drinking Water Quality Regulator, the Scottish Environment Protection Agency, the Water Industry Commissioner and Scottish Water.

The outcome was to agree a capital investment programme (Quality and Standards 2) from 2002 to 2006, originally costed at £2.3 billion.

The Water Industry Commissioner advised that a merged Scottish Water using procurement processes closer in efficiency to that elsewhere in the UK, could deliver the programme for 1.8 billion pounds - a saving of £500 million to customers and the public purse.

Scottish Water's Board concluded that the methods used by the previous authorities would not deliver the investment within the challenging cost and time targets. As a result, approval was sought from Ministers to establish an Asset Delivery Partnership (ADP) which would use 'state of the art' expertise to secure more efficient and timely delivery of capital investment.

Scottish Water has reached agreement with its prospective partners. The two consortia partners are Stirling Water - comprising Thames Water, Kellogg Brown & Root, Alfred McAlpine, and MJ Gleeson - and UUGM - comprising United Utilities, Galliford Try and Morgan Est.

The process of selecting its partners complied with relevant EU rules relating to such procurement. Scottish Water will remain solely responsible to Ministers for achievement of delivery of the capital investment programme. The two private sector consortia involved will bring substantial private sector expertise to that process.

As well as improving Scotland's water and wastewater networks, investment in the water industry supports an estimated 5000-8000 construction jobs throughout Scotland.

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