Ofwat approves c£500m cost uplift for five-fold expansion of Havant Thicket capacity

(by Karma Loveday)

Ofwat has approved draft funding to enable a five-fold expansion of the capacity of the Havant Thicket reservoir, and recognised that the forecast operational date needs to be pushed back from 2029 to 2034 to accommodate changes to the original design.

Under the regulator’s decision, which is out for consultation until 12 October, the original allowed totex of £339m would be increased to £823m, under the second cost adjustment mechanism (CAM2) to the Havant Thicket price control. This is £26m less than Portsmouth Water pitched for in its submission. Portsmouth is building the reservoir as a resource to supply Southern Water’s customers.

The uplift recognises: 

• Cost increases associated with Southern Water’s Hampshire Water Transfer and Water Recycling (HWTWR) scheme. At PR19, Havant Thicket was expected to operate primarily as a summer-use asset, storing surplus water from Bedhampton Springs during winter periods for release during drier months. This offered a deployable output of around 21 megalitres per day. But Southern subsequently selected HWTWR as its preferred option to plug further supply gaps. This involves constructing a water recycling plant to produce high-quality recycled water, which is transferred to Havant Thicket for storage before onward transfer to Southern Water’s Otterbourne water supply works for treatment and distribution. This will boost the deployable output from Havant Thicket to 111Ml/d and enable it to operate year-round. Ofwat has elected to allow costs for this enhanced scheme now, to avoid additional cost and disruption later. Portsmouth has had to modify its original reservoir design and build additional infrastructure to support the proposed new operating model – albeit Southern awaits planning permission for the recycling scheme. 

• Unforeseen ground conditions, including extensive shear planes and sand formations, were identified in autumn 2023. These have necessitated a major redesign of the reservoir embankment, causing material impact on project costs and the delivery timeline. 

Ofwat said: “Taken together, these developments mean that the project is now larger, more complex and expected to take longer to deliver than assumed at PR19.”

The news came as Portsmouth Water hosted a community event last week to mark the start of tunnelling work, to house the pipelines that will take water to and from the new reservoir. Work will take place over the next three years, with 7km of pipelines due to be complete by 2029. Disruption through populated areas will be minimised using the micro-tunnelling technique.

At the event, Portsmouth chief executive Bob Taylor championed the work as pioneering the way for nine other reservoirs, and said the enhanced design was “future proofing” the scheme and enabling a “strong and powerful addition” in terms of capacity and resilience.

RAPID director Andy Turner said the work was “not just a story of one reservoir, but part of a much bigger narrative” on building resilience through partnership, with Havant Thicket at the head of a “new wave of major infrastructure” in the Major Water Infrastructure Programme.