Four vie for £2.9bn PFI MoD water work

by Glenda Thisdell



Four consortia have been short-listed for the first phase of a £2.9bn private finance deal to maintain and operate the Ministry of Defence (MoD) water and waste water business.

Working up bids are:

l Brey Utilities, comprising Brown and Root, Earth Tech and Yorkshire Water.

l C2C, comprising Severn Trent, Costain and Arup.

l Diamond Alliance.

l Thames Water.

The 25-year deal involves taking over responsibility for the department's water and waste water assets and infrastructure at 1,000 sites in central southern England, western England and Wales.

Consortia must now draw up bids in anticipation of a preferred bidder being chosen in early 2003. An award will be made later that year.

Two further packages are also on offer, covering Scotland and the north and east of England. OJEC adverts went out for these last December and pre-qualification questionnaires will be sent to interested companies this month. Awards for these two are expected to be made about 18 months after the first package is signed.

Management of water and waste water was identified as a non-core business for the MoD, but increasingly stringent environmental standards mean investment in infrastructure is needed. Deals struck with the private sector are expected to save the MoD £20m a year on a current annual spend of £100m.