In its 2019 Price Review PR19, Ofwat made £469 million available to water companies to jointly investigate and develop strategic water resource solutions to increase future water supply – and the Regulators’ Alliance for Progressing Infrastructure Development (RAPID) was created.
Currently, there are 18 strategic solutions being explored within the RAPID programme, with a potential investment of up to c.£14 billion – the first time since the privatisation of the water sector in 1989 that there will be such a large supply side intervention and collaboration. We aim to see many of these solutions being developed and delivered over the next 15 to 20 years and beyond, with a potential small number of solutions ready for construction in the 2025 to 2030 period.
Large projects are expected to be taken forward through Direct Procurement for Customers (DPC), whereby water companies put major projects out to competitive tender for delivery by third parties. The majority of the upcoming pipeline of RAPID schemes are considered to be suitable for delivery via DPC.
These projects provide investors the opportunity to participate in the English and Welsh water and wastewater sector in a meaningful way and help deliver long term strategic projects which are vital to meeting customers’ future needs. While RAPID is the most immediate pipeline of projects, we are expecting further DPC projects to also be identified through PR24 and at other future price reviews.
We see this offers a significant opportunity for investors and supply chain to participate in a forward capital programme. The water sector has a strong track record for long term stable returns and a revenue stream underpinned by regulated revenues payable by customers and therefore is an attractive proposition to investors.
More information can be found in Building a resilient future – a guide for investors and the supply chain. Please note, the information about the solutions has been updated following the Gate two draft decisions – Updated Strategic Resource Option (SRO) Information from the RAPID Gate Two Draft Decisions.
|RAPID supply chain and investor surveys – May 2023
At the beginning of May, Ofwat/RAPID sent out two surveys to understand the views of the supply chain and investors in the context of the upcoming RAPID programme. These surveys focused on understanding what the current appetite for the upcoming RAPID pipeline is, how we can make this more successful from a regulatory and commercial view and which privately finance schemes we should learn from as we consider the development of the programme.
You can access the Understanding the views of the supply chain and investors report here, which will provide an overview of the responses received and some of the key comments that were identified.
As a next step, we plan to host a number of bilateral meetings and roundtables later on in the year to discuss these with key members in further detail.
If you have any questions or would like to talk to the team, please get in touch via [email protected].