Regime for Specified (Special) Water and Sewerage Infrastructure Projects in England – Phase 2

This consultation presents the Government’s ‘next steps’ to taking forward the proposals for new secondary legislation to be made under section 36A of the Water industry Act 1991 that we consulted on in February 2011.  In our response to that consultation, published in September 2011, we said we would consider the proposals further and make a decision on the way forward in due course.

The proposed legislation would enable Infrastructure Providers (IPs) to finance and deliver large or complex high-risk water and sewerage infrastructure projects.  Proposed IPs would be competitively tendered by English water and sewerage companies (known as “undertakers”), and separately regulated by Ofwat in a manner similar to undertakers.

Where large or complex high-risk projects could threaten an undertaker’s ability to provide its existing water and sewerage services, for example by changing its risk profile and pushing up its cost of capital for all its ‘normal risk’ projects, the proposed legislation would address the problem by isolating the associated risks and costs of large and complex “specified projects”, containing them better in separate distinct IPs which would finance and deliver them.  The costs of a specified project would then be passed on from the IP to the customers of the undertaker concerned.

The proposals should help provide overall better value for money for financing and delivering such projects, while helping to keep water and sewerage customers’ bills as low as possible.

Name:  Philip Ryland-Jones

Email: specialinfrastructureconsultations@defra.gsi.gov.uk

Address:  SIP Regs Next Steps Consultation Responses
Department for Environment, Food, and Rural Affairs
Area 2A, Ergon House
Horseferry Road
London SW1P 2AL

Telephone:  020 7238 159

• Regime for Specified (Special) Water and Sewerage Infrastructure Projects in England (first consultation)