UK water sector taps infrastructure spend

London – The UK’s regulated water industry is continuing to spend hundreds of millions of pounds on new infrastructure and operational maintenance in the current 2010-15 AMP5 investment period. This, notes a new Waterbriefing report, is in contrast with ongoing weakness in other construction spend.

The ‘Complete AMP5 Contracts and Tier 1 Contractors June 2012 ’ report outlines how the UK water and sewerage companies are spending record amounts to ensure that water assets continue to meet the demands of a growing population and climate change, as well as the increasingly stringent environmental standards set by the EU.

Waterbriefing found that the big construction companies who form the major alliances which undertake much of the engineering and construction for the water companies, are committed to outsourcing work to local companies to ensure local economies benefit.

In the face of the downturn in the UK construction industry, the water sector continues to offer opportunities for a wide range of small and medium sized businesses, it said.

However, the report flags up the need for both small and large companies alike to develop an understanding of how the water companies and the alliances work together on major multi-million pound projects and contracts which span five year periods and beyond.

Information on how the alliances operate is particularly key - they frequently control a significant proportion of the water companies’ capital budgets and as partners they are often heavily involved in the procurement process.

Water companies are now firmly underway on planning for their upcoming five year capital investment for 2015-20, which looks set to eclipse the record £22 billion spend in AMP5 - and the report says that their suppliers should be putting their own strategies in place now to make sure they can take advantage of the opportunities.

“The UK water sector is not a quick-fix solution to companies who are trying to make up the slack from a fall-off in work in other business sectors.,” said Elaine Coles, publisher of the Waterbriefing report.

“However, firms that make the effort to identify both the opportunities - of which there are many - and the relationships they need to develop with potential clients, will be much better placed to be successful bidders for upcoming contracts in both AMP5 and AMP6,” she added