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

Dwr Cymru Cyfyngedig

This public procurement record has 1 release in its history.

Planning

24 Jul 2026 at 12:50

UK2 - Preliminary Market Engagement Notice
Summary of the contracting process

Dŵr Cymru Cyfyngedig, trading as Welsh Water, is planning a major water infrastructure scheme under the Cwm Taf Water Supply Strategy. The project is intended to secure reliable, sustainable drinking-water supplies and includes design, construction and finance for a new water treatment works at Dan-y-Castell Farm near Merthyr Tydfil, a raw-water pumping station at Pontsticill, and an upgrade to Llwyn-onn Water Treatment Works within Bannau Brycheiniog National Park. The wider scope includes treated-water storage, transfer pipelines, pumping stations, water treatment infrastructure, and environmental and mitigation measures. The work is classified as construction and water-project works, with related engineering, construction management and finance services. Delivery is primarily across two South Wales sites.

This procurement is at the planning and preliminary market-engagement stage; it is not yet a tender competition. Welsh Water expects to appoint a Competitively Appointed Provider through the Direct Procurement for Customers model, using a future competitive procurement. The indicative estimated value is £556 million excluding VAT, or £667.2 million including VAT. Current site estimates are £362 million excluding VAT (£434.4 million including VAT) for Dan-y-Castell and £194 million excluding VAT (£232.8 million including VAT) for Llwyn-onn. The planned contract period is 30 November 2028 to 30 November 2058, with contract award anticipated in late 2028. Investor and lender engagement registrations are due by 4 August 2026; wider-market event registration is due by 10 August 2026, with events planned in Cardiff on 8 September 2026 and London on 9 September 2026. Dates and values are indicative.

The future procurement is likely to suit major infrastructure investors, lenders and institutional capital providers, as well as developers, sponsors, construction companies, engineering firms, designers and other delivery organisations. Relevant capability includes financing or delivering large water and civil-engineering projects, water-treatment works, pumping stations, pipelines, storage and environmental mitigation. The appointed provider is expected to combine design, construction and finance and then progress the scheme through testing, commissioning and a reliability and optimisation period before the operational term begins. Firms with experience of complex commercial models, risk allocation, payment mechanisms, long-term infrastructure contracts and financeability will be well placed to contribute. Welsh Water welcomes existing joint ventures and consortia and encourages new partnerships, so businesses should consider suitable delivery and finance alliances before the competitive process is launched.

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Notice Information

Notice Title

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

Notice Description

Dwr 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 PS434,400,00 including VAT / PS362,000,000 excluding VAT) and Llwyn-onn (currently with an estimated value of PS232,800,000 including VAT / PS194,000,000 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

Planning Information

Market Engagement – Investors and Lenders DCWW wishes to engage with organisations that are infrastructure investors, lenders or other providers of institutional capital with experience of financing major infrastructure projects. Investors, lenders or other providers of institutional capital wishing to provide feedback on the emerging commercial model, financing approach and financeability of the Cwm Taf WSS Procurement Scheme should register their interest by emailing CwmTafScheme@dwrcymru.com no later than 4 August 2026. Registered participants will be issued with a questionnaire for completion and return by the response deadline which will be set out in the questionnaire. Following review of questionnaire responses, DCWW will consider responses and may, at its discretion, engage in one-to-one discussions to explore and clarify matters raised in their submissions and obtain further feedback on key commercial, contractual and financing issues. Who Should Participate -Providers of debt and equity finance -Developers and sponsors in each case in major new infrastructure projects. To promote transparency and ensure equal treatment of all market participants, DCWW intends to share an anonymised summary of key themes and insights arising from this focused Market Engagement with the wider market in advance of the Market Engagement events referred to below. No organisation-specific information will be disclosed. Market Engagement – Wider Market DCWW intends to hold in-person Market Engagement events open to the wider market – whether investors, lenders, contractors, designers and other delivery organisations - interested in the Cwm Taf WSS Procurement Scheme. The events will provide an update on the Cwm Taf WSS Procurement Scheme, the proposed procurement approach, commercial model, contractual framework and financing strategy, and will provide an opportunity for participants to ask questions and provide feedback on the developing procurement and commercial arrangements. Details of the event format, indicative agenda, locations and registration arrangements are set below. Who Should Participate -Infrastructure investors and major infrastructure financing bodies -Design, construction and engineering firms -Contractors and other delivery organisations DCWW welcomes participation from existing joint ventures and consortia and encourages the formation of new partnerships where appropriate. Market Engagement Event Dates and Locations DCWW intends to hold in-person Market Engagement events at the following locations: -Cardiff – 8 September 2026, time TBC -London – 9 September 2026, time TBC Organisations wishing to attend should register by 10 August 2026. Further details, including venue information and the final agenda, will be provided to registered participants. The Market Engagement events are expected to comprise presentations and opportunities for market participants to engage in discussions and provide feedback on the developing procurement, commercial, contractual and financing approach for the Cwm Taf WSS Procurement Scheme. For further information, market participants should register via the contact details below. Registration Process Please email CwmTafScheme@dwrcymru.com to register your interest in either: -the focused investor/lender Market Engagement; and/or -the in-person Market Engagement events. DCWW will provide further details regarding participation, key dates and engagement materials following registration. When emailing, please include one of the following subject lines to indicate your preferred engagement activity: -Registration – Investor/Lender Market Engagement -Registration – In-Person Market Engagement Event -Registration – Investor/Lender and In-Person Market Engagement Events (if registering for both) Purpose of this Notice and Previous Engagement Since the previous market engagement, DCWW has continued to develop the commercial, contractual and financing strategy for the Cwm Taf WSS Procurement Scheme. In particular, further consideration has been given to the proposed CAP Agreement structure, risk allocation framework, payment mechanism, financing approach and procurement strategy. This engagement seeks to obtain market feedback on these. Topics for Feedback/Discussion Topics that DCWW is seeking market feedback on include: -CAP Agreement structure and contractual framework -Commercial and risk allocation principles -Payment mechanism and incentivisation arrangements -Financing structures and financeability considerations -Contract duration and residual value approach -Procurement process design and bidder participation -Opportunities to improve value for money for customers Future Market Engagement This notice covers both the planned investor/lender Market Engagement and the in-person Market Engagement events. DCWW may undertake additional market engagement activities and will update the market as appropriate. General Participation in any market engagement activity is not a condition of participation in any future procurement process. DCWW may use information obtained through these engagement activities to refine its procurement strategy, commercial model, contractual arrangements and procurement documentation. Details of the preliminary market engagement activities, documents shared, key themes arising from feedback and any relevant questions and answers will be made available to the market as appropriate and reflected in the procurement documentation issued at the launch of the competitive process. DCWW reserves the right to alter or terminate the market engagement process at any time without notice. DCWW is not liable for any costs or expenses incurred by any party in responding to this market engagement. Submission of a response does not guarantee inclusion in any future procurement process. DCWW reserves the right to enter into further rounds of pre-market engagement. All future procurement opportunities will be published through the Central Digital platform (CDP). DCWW will process your personal data, such as your name and contact details, in accordance with its obligations under the UK General Data Protection Regulation and Data Protection Act 2018. Your personal data will be used for the purposes contacting you for further information and to invite participation in future market engagement activities connected with the Cwm Taf WSS Procurement Scheme only. Any information you provide may be shared with our Cwm Taf WSS Procurement Scheme commercial and or legal advisors. Further information on the Cwm Taf WSS Procurement Scheme and this market engagement can be found in the supporting press release available at: https://corporate.dwrcymru.com/en/news-media/2026/welsh-water-launches-market-engagement-for-larges…

Notice Details

Publication & Lifecycle

Open Contracting ID
ocds-h6vhtk-06d32b
Publication Source
Find A Tender Service
Latest Notice
https://www.find-tender.service.gov.uk/Notice/070264-2026
Current Stage
Planning
All Stages
Planning

Procurement Classification

Notice Type
UK2 - Preliminary Market Engagement Notice
Procurement Type
Standard
Procurement Category
Works
Procurement Method
Not Specified
Procurement Method Details
Not specified
Tender Suitability
Not specified
Awardee Scale
Not specified

Common Procurement Vocabulary (CPV)

CPV Divisions

45 - Construction work

65 - Public utilities

66 - Financial and insurance services

71 - Architectural, construction, engineering and inspection services

CPV Codes

45000000 - Construction work

45200000 - Works for complete or part construction and civil engineering work

45231100 - General construction work for pipelines

45231300 - Construction work for water and sewage pipelines

45240000 - Construction work for water projects

45252126 - Drinking-water treatment plant construction work

65100000 - Water distribution and related services

66100000 - Banking and investment services

66122000 - Corporate finance and venture capital services

71322000 - Engineering design services for the construction of civil engineering works

71500000 - Construction-related services

71540000 - Construction management services

71541000 - Construction project management services

Notice Value(s)

Tender Value
£556,000,000 £100M-£1B
Lots Value
Not specified
Awards Value
Not specified
Contracts Value
Not specified

Notice Dates

Publication Date
24 Jul 20262 months ago
Submission Deadline
Not specified
Future Notice Date
Not specified
Award Date
Not specified
Contract Period
30 Nov 2028 - 30 Nov 2058 Over 5 years
Recurrence
Not specified

Notice Status

Tender Status
Planning
Lots Status
Planning
Awards Status
Not Specified
Contracts Status
Not Specified

Buyer & Supplier

Contracting Authority (Buyer)

Main Buyer
Dwr Cymru Cyfyngedig
Contact Name
Available with D3 Tenders Premium →
Contact Email
Available with D3 Tenders Premium →
Contact Phone
Available with D3 Tenders Premium →

Buyer Location

Locality
CARDIFF
Postcode
CF3 0LT
Postcode Area
Cardiff
Country
Wales
Major Region (ITL 1)
TLL Wales
Basic Region (ITL 2)
TLL5 South East Wales
Small Region (ITL 3)
TLL52 Cardiff and Vale of Glamorgan
Delivery Location
TLL15 Central Valleys
Local Authority
Cardiff
Electoral Ward
Trowbridge
Westminster Constituency
Cardiff East

Further Information

Notice Documents

Open Contracting Data Standard (OCDS)

View full OCDS Record for this contracting process

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The Open Contracting Data Standard (OCDS) is a framework designed to increase transparency and access to public procurement data in the public sector. It is widely used by governments and organisations worldwide to report on procurement processes and contracts.

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