Ofwat sets out how combined major infrastructure gates will work

(by Karma Loveday)

Ofwat has published an overview of the combined gated process it and RAPID will now use to oversee and support the Major Water Infrastructure Programme. This consists of 30 projects, each valued at £200m+ totex, and either RAPID’s Strategic Resource Options or projects meeting the criteria for competitive procurement — Direct Procurement for Customers (DPC) or the Specified Infrastructure Project Regulations (SIPR).

There are now six gates, each associated with a decision that is required before the project can move on the next phase. Ofwat set out the following: 

• Gate A: Approval to progress the preferred and adaptive options to the next stage of design. Authorisation to proceed to initial development stage — to further the design and undertake the required environmental and water quality assessments.

• Gate B: Approval (subject to the combined agreement of partner regulators) that the selected project is viable, supported by a validated needs case and confirmed feasibility, with all required environmental assessments completed. Authorisation to proceed to the development and commercial stage — to progress the development of required strategies and to prepare and submit the necessary planning and/or consent applications.

• Gate C: Approval by Ofwat that the project is ready to commence procurement, supported by a detailed commercial and procurement approach, the developed design, and completed environmental assessments. Authorisation to proceed to the procurement stage — to initiate procurement and designation under DPC, or specification under SIPR.

• Gate D: Approval by Ofwat to enter into contracts and financial close once the procurement process has been completed. Authorisation to proceed to construction stage.

• Gate E: Conclusion of the construction and commissioning periods, and any associated regulatory actions under licence provisions.

• Gate F: Conclusion of the contract closeout and transfer assets under DPC at the end of the concession period, or the application of the price review process (operational costs for next AMP) under SIPR.

A separate document set out the detail on initial development and Gate B. 

• Ofwat is consulting until 14 May on designating the White Horse Reservoir in Abingdon as a Specified Infrastructure Project. This would require Thames Water to obtain competitive bids from an independent third party to finance and deliver the project, except for work set out by Ofwat in a Preparatory Works Notice, which is also subject to consultation. Ofwat would then designate and licence the successful bidder as the Infrastructure Provider.