Severn Trent appoints 11 contractors early on £3bn AMP5 package

Severn Trent Water has awarded the contracts for its next asset management period (AMP5) a year ahead of schedule in order to reduce delays at the start of the spending cycle.

Eleven companies have been appointed for the the water company's part of the work, which begins in April 2010. It will be a five year programme worth around £3bn depending on Ofwat’s decision on water and sewerage prices for 2010-15, due later this year.

The 11 companies are:

• Balfour Beatty
• Barhale
• Biwater
• Costain
• Enterprise
• Interserve
• LoRImtech
• May Gurney
• Mott MacDonald Bentley
• Morgan Est
• North Midland Construction

Paul Goddard, Severn Trent’s commercial manager, purchasing and supply chain management, said the contractors had been selected early from a list of 47 so that they can “hit the ground running” in 2010.

He added: “When the new investment period starts in spring 2010 construction can begin immediately – avoiding the notorious roller-coaster effect which is so wasteful of time and resources. British Water, for example, estimate this cost to be as much as 2.6% of their total project costs.”

Contractors were selected using e-auctions and the contracts last for 10 years, covering two AMPs.

Goddard said: “We have set ourselves challenging target capital efficiency targets and we’ll be doing everything we can to outperform these. This will put everyone in our ‘one supply chain” in great shape for the next 10 years.”