Cwm Taf Water Supply Strategy Procurement Scheme - Direct Procurement for Customers (DPC)

Dŵr Cymru Welsh Water (DCWW) is the largest water and sewerage company in Wales and the sixth largest operating in England and Wales. Responsible for providing high-quality drinking water for over three million customers and for taking away, treating and properly disposing of the wastewater that is produced.

DCWW is committed to securing water supplies for future generations while protecting the environment. Our primary responsibility is to operate, maintain and upgrade this large network of assets to ensure a safe and reliable drinking water supply and to deal effectively with discharges so as to protect the environment.

As part of its Cwm Taf Water Supply Strategy (“Cwm Taf WSS”), DCWW is seeking to progress a major investment project to design and build new water treatment works and develop an existing water treatment works (the Cwm Taf WSS Procurement Scheme). The Cwm Taf WSS Procurement Scheme has been designated under Ofwat's Direct Procurement for Customers (DPC) programme.

The Cwm Taf WSS Procurement Scheme is intended to be delivered primarily on two separate sites, one located in the vicinity of MerthyrTydfil, South Wales and one within the boundaries of the Bannau Brycheiniog National Park. DCWW is looking to appoint a Competitively Appointed Provider (CAP) utilising the Direct Procurement for Customers (DPC) model.

The scheme includes the Design, Build and Finance (DBF) of a new water treatment works on an agricultural land at Dan-y-Castell Farm, along with a raw water pumping station at Pontsticill (referred to as the Dan-y-Castell project) and Llwyn-onn Water Treatment Works upgrade (referred to as the Llwyn-onn project). The Cwm Taf WSS Procurement Scheme is therefore a two-site project comprising Dan-y-Castell (currently with an estimated value of £434,400,00 including VAT / £362,000,000 excluding VAT) and Llwyn-onn (currently with an estimated value of £232,800,000 including VAT / £194,000,000 excluding VAT).

The Cwm Taf WSS Procurement Scheme includes (but is not limited to): -Water Treatment Works -Pumping stations -Transfer pipelines -Environmental and mitigation measures -Treated Water Storage This notice seeks to inform the market of DCWW's upcoming market engagement activities for the Cwm Taf WSS Procurement Scheme and seek engagement from interested suppliers, including: -a Market Engagement process focused on investors, lenders and organisations capable of providing institutional finance, to specifically seek feedback on the emerging commercial model and financing approach; and -In-person Market Engagement events open to investors, lenders, contractors, designers and other delivery organisations interested in the Cwm Taf WSS Procurement Scheme. Across these activities, DCWW is seeking engagement from organisations capable of supporting the delivery and financing of a secure, sustainable and value-driven solution for customers through this major DPC-designated infrastructure project.

The engagement activities will support the ongoing development of the procurement and commercial strategies (and associated documentation) and will help inform the delivery of the Cwm Taf Water Supply Strategy and the sustainable and environmental objectives of the Welsh Government, including (but not limited to) the Wellbeing of Future Generations (Wales) Act 2015. Following a competitive procurement competition, CAP contract award is anticipated to be late 2028.

The CAP contract will progress the Scheme through detailed design, construction, testing and commissioning activities, including an anticipated 12‑month Reliability and Optimisation Period. The Scheme will then be completed to allow commencement of the DCWW managed operational term.

All dates are indicative. All values and dates set out in this preliminary market engagement notice are indicative. This notice is not a call for competition, a tender notice, or a commitment to procure