Water Industry Forum advises how to make Direct Procurement for Customers a success

The Water Industry Forum, in partnership with Turner & Townsend, has published a short paper on how to make Direct Procurement for Customers (DPC) projects a success. This followed a multi-stakeholder roundtable to consider the model and learnings from the three DPC projects progressing towards launch.

WIF said the following factors were the key influences on the success of DPC projects:

• the Competitively Appointed Provider (CAP) agreement should detail risk allocation and define required behaviours if things don’t go as envisaged;

• on commercial decision making, parties should understand “go/ no go” decisions for water companies to avoid significant wasted effort, and ensure that it a project fails it can “fail fast and fail safe”;

• the regulatory regime must be stable and give confidence in the DPC model for at least ten years;

• private financiers and supply-chain companies must be engaged throughout, and their interests, concerns and capacity understood, and where possible standardisation will support project attractiveness to financiers; and

• assessment of the resource requirements needed to get to a CAP contract award must be realistic – open and regular dialogue with Ofwat is advised, as is mindfulness of potentially challenging timelines.

The three existing DPC projects, which have a combined value greater than £1bn, are:

• United Utilities' HARP project – tender due in Q1 2022;

• Anglian Water Middlegate Treatment Works – tender due in Q1 2022; and

• Welsh Water Cwm Taf Water Treatment works – tender due in Q2 2022.

Additionally, there is a pipeline of 18 projects going through the RAPID process, some of which may be delivered as DPC projects.