Letter from the Parliamentary under Secretary
of State to the Chairman (12 December 2002)
I am writing to inform you that I have announced
today the selection of Brey Utilities—comprising Yorkshire
Water, Tyco Tech Limited and Halliburton Brown and Root—as
the Preferred Bidder for the first package of MoD's contract to
provide water and wastewater services, Project Aquatrine. Subject
to satisfactory negotiations it is intended to sign the contract
in March 2003 and go-live in December 2003.
Project Aquatrine is one of the Government's
significant Public Private Partnership projects. The project is
being undertaken by the Ministry of Defence (MoD) in England,
Wales and Scotland with the aim of transferring responsibility
for the maintenance and operation of MoD water and wastewater
assets and infrastructure to private sector service providers.
This enables the MoD to exit a non-core business whilst yielding
significantly better value for money through the injection of
private sector expertise and improving the MoD's environmental
impact.
The project will be delivered as three separate
contracts called Packages. Package A (which covers South West
England and Wales) will be transferred first with Package B (Scotland)
and Package C (North and East of England) following in June 2004.
There are a number of reasons why Aquatrine
is necessary. Historically, the MoD has managed its water and
wastewater assets in a non-strategic manner with investment taking
place on an ad-hoc basis and with little prioritisation,
resulting in fragmented investment and poor management. As with
other departments, the MoD is facing the ongoing loss of Crown
Immunity, coupled with increased environmental legislation and
risk. To address these problems would have required a significant
investment of public funds, which would have had to compete against
the other defence priorities.
Brey Utilities' bid submission represented considerable
value for money compared with conventional capital procurement.
They demonstrated an in-depth understanding of the MoD's partnering
expectations and this was clearly visible throughout their bid
submission. They offered specialist private sector expertise,
strategic management of the portfolio of MoD infrastructure and
innovation regarding asset exploitation. The MoD should therefore
benefit from better services from an industry expert, improved
and upgraded assets and services that meet our statutory obligations.
I am satisfied that delivery of Project Aquatrine
offers not only value for money over our current water and wastewater
services, but also offers an improved service, as well as complying
with more stringent environmental legislation. In conclusion the
preferred bidder offers the best and most cost-effective solution,
and the department will place the contract with them, subject
to satisfactory contractual negotiations.
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