Contractors and counterparties of Southern Water

analysisContract award notice 2024/S 000-036196, published on Find a Tender on 8 November 2024, records that Southern Water Services Ltd. established a framework agreement titled 'AMP 8 Framework- Capital Strategic Delivery Partners (SDP)' (reference prj_4006). It was a works procurement, awarded by negotiated procedure with prior call for competition and divided into three lots: Lot 1 'Capital SDP Non-Infrastructure Water', Lot 2 'Capital SDP Non-Infrastructure Wastewater' and Lot 3 'Capital SDP Infrastructure Water & Wastewater'. The notice describes the AMP8 regulatory period as running from April 2025 to March 2030 and states that the new arrangements will offer the option of running for AMP9. It gives the total value of the procurement as £6,200,000,000 excluding VAT, without describing the figure as a maximum or an estimate; an award notice for a framework does not show how much work has been ordered or paid. ¹

analysisUnder the notice, contract no. 1 of the framework, covering lots 1 and 2 ('SDP Non Infra Water and Wastewater'), was concluded on 7 November 2024 with a group of economic operators, Costain Limited (London) and MWH Treatment Limited (Helsby). Contract no. 2, also covering lots 1 and 2, was concluded on 8 October 2024 with Kier Integrated Services Limited (Salford). For each of these two contracts the notice gives a total value of the contract/lot of £1,881,833,333.33 excluding VAT, and four tenders were received. Contract no. 3, covering lot 2 ('SDP Non Infra Wastewater'), was concluded on 8 October 2024 with Galliford Try Construction Limited (Middlesex), with a value of £907,333,333.33 excluding VAT and four tenders received. Contract no. 4, covering lot 3 ('SDP Infra Water & Wastewater'), was concluded the same day with Morrison Water Services Limited (Stevenage), with a value of £1,524,000,000 excluding VAT and three tenders received. The notice does not say whether any of these values is a maximum, or how contract no. 1 is shared between its two group members; it records the framework awards, not work ordered or paid. It names the contractor of contract no. 2 only as Kier Integrated Services Limited and says nothing about its ownership. ¹

analysisContract award notice 2024/S 000-017583, published on Find a Tender on 6 June 2024, records that Southern Water Services Ltd. established the 'Southern Water AMP 8 Professional Services Framework' (reference prj_4007), a services framework agreement awarded by negotiated procedure with prior call for competition, in three lots: Lot 1 Asset Management Support Services, Lot 2 PMO and Project Management, and Lot 3 Technical & Engineering Support Services. The notice lists nine contracts, each concluded on 13 May 2024, and says the framework is anticipated to run for the duration of AMP8, with an option to extend into AMP9. It gives the total value of the procurement as £240,000,000 excluding VAT, without describing the figure as a maximum or an estimate; an award notice does not show how much work has been commissioned or paid. ¹

analysisEach lot has three contracts, all concluded on 13 May 2024. In lot 1 they went to Mott MacDonald Limited (registration number 1243967), AECOM Limited (01846493) and Ove Arup & Partners Limited (1312453), from eight tenders. In lot 2 they went to KPMG LLP (OC301540), AECOM Limited and Turner and Townsend Project Management Limited (02165592), from nine tenders. In lot 3 they went to Mott MacDonald Limited, Stantec UK Limited (01188070) and, jointly as a group of economic operators, Binnies UK Limited (3163649) and WSP UK Limited (1383511), from eight tenders. Mott MacDonald and AECOM were thus each awarded contracts in two lots. For each contract in a lot the notice repeats the same total value of the contract/lot: £80,000,000 in lot 1, £64,000,000 in lot 2 and £96,000,000 in lot 3, excluding VAT. It does not say how these figures are divided among the suppliers or whether they are maxima. ¹

analysisA Capita contract is mentioned in the supplementary prospectus of 30 July 2025 for SW (Finance) I PLC's guaranteed bond programme, which Southern Water Services Limited guarantees. In its description of the retail household price control, the prospectus states that Southern Water's AMP8 strategy includes embedding new operational service partners and that 'SWS will be driving efficiency improvements in the Capita contract via process improvement'. The prospectus does not describe the contract's scope, value or term, or which Capita entity is the contracting party; it places the reference in the section on the retail household business, which covers billing, debt management, meter reading and customer-side leakage. ¹

analysisNote 34 (financial commitments) to Southern Water Services Limited's financial statements for the year ended 31 March 2026 states that in February 2021 the company entered into a contractual arrangement with Portsmouth Water Limited. Under it, after the reservoir has been constructed and Southern Water has laid a pipe, Portsmouth Water will supply Southern Water with 21 million litres of water a day as part of the development of the Havant Thicket Reservoir in Portsmouth Water's supply area. The contract runs from 2021 to 2100 and comprises fixed capacity charge payments and volumetric charges. The fixed contractual payments total £2,575.0 million over the period to 2100 (2025: £2,563.0 million); discounted at 6.53%, the nominal return on capital allowed in the PR24 Final Determination, their present value at 31 March 2026 is £440.9 million (2025: £427.7 million). The note lists the right to receive water from Portsmouth Water Limited among the company's capital commitments. ¹