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

Procurement reference

DCWW1994

Procurement description

Scope

Update to Preliminary Market Engagement Notice

This update to the Preliminary Market Engagement Notice published on 24 July 2026 (notice identifier 2026/S 000-070264) provides details of the next phase of market engagement for the Cwm Taf Water Supply Strategy, ahead of the planned procurement launch in Q1 2027.

The “Engagement” section has been revised to summarise engagement undertaken to date and to provide information on a Meet The Buyer event on 10 November 2026, and details in relation to a data room to be made available before planned procurement launch. These arrangements replace the corresponding Engagement and Registration section in the 24 July 2026 notice.

Earlier engagement in respect of the Cwm Taf WSS was advertised in the notice published on 10 November 2025 (notice identifier 2025/S 000-072565).

Except as expressly amended by this update, the information published in notice 2026/S 000-070264 remains unchanged.

Description

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 Merthyr Tydfil, 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 £434,400,000 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

Across its market engagement activities, DCWW has been 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 to date and activities highlighted in the update to this notice will support the ongoing development of the procurement and commercial strategies (and associated documentation) and will help inform the delivery of the Cwm Taf WSS and the sustainable and environmental objectives of the Welsh Government, including (but not limited to) the Wellbeing of Future Generations (Wales) Act 2015.

The current market engagement activities and participation arrangements are set out in the Engagement section below.

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.

Main category

Works

Delivery regions

• UKL15 - Central Valleys

Total value (estimated)

556000000.00 GBP Excluding VAT

667200000.00 GBP Including VAT

Contract dates (estimated)

30 November 2028, 00:00AM to 29 November 2058, 23:59PM

Dwr Cymru Cyfyngedig

Is this procurement under a special regime?

Utilities

Is the total value above threshold?

Above threshold

CPV classifications

• 65100000 - Water distribution and related services
• 71322000 - Engineering design services for the construction of civil engineering works
• 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
• 66122000 - Corporate finance and venture capital services
• 71541000 - Construction project management services
• 66100000 - Banking and investment services
• 45200000 - Works for complete or part construction and civil engineering work
• 45000000 - Construction work
• 71540000 - Construction management services
• 71500000 - Construction-related services

Delivery regions

• UKL15 - Central Valleys

Contract start date (estimated)

30 November 2028, 00:00AM

Contract end date (estimated)

29 November 2058, 23:59PM

Engagement process description

Engagement

A. Engagement undertaken to date

DCWW has undertaken market engagement activities for the Cwm Taf WSS scheme, including the November 2025 market engagement event advertised in notice 2025/S 000-072565; targeted engagement with prospective investors and lenders, and market engagement events held in Cardiff on 8 September 2026 and London on 9 September 2026, as advertised in notice 2026/S 000-070264.

Feedback on the proposed CAP Agreement structure, risk allocation, payment mechanism, financing approach and procurement strategy has informed DCWW's on-going development of the procurement competition and associated documentation.

DCWW is now progressing further market engagement ahead of the planned procurement launch in Q1 2027.

B. Supply chain conference: Delivering the next generation of water infrastructure for Wales – 10th November 2026

DCWW intends to hold a supply chain event on 10 November 2026 at the International Convention Centre Wales (ICC Wales), Coldra Wood Drive, Newport, NP18 1DE. The event is a DCWW wide event and will cover opportunities across DCWW’s programmes including a Cwm Taf WSS element.

The Cwm Taf WSS element will provide an update on the scheme's progress and its developing procurement approach, together with opportunities for any interested organisation to meet potential partners or future consortium members, DCWW supply-chain organisations and local Welsh businesses. The networking opportunities are intended to support consortium formation and potential supply chain relationships ahead of the procurement launch.

Registration

Organisations should register via Business Wales https://wales.business-events.org.uk/en/events/supply-chain-conference-delivering-the-next-generation-of-water-infrastructure-for-wales/ by 4 November 2026.

Who Should Participate

From a Cwm Taf WSS perspective, participation is encouraged from:

• 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.

C. Pre-Procurement Data Room

DCWW intends to make a data room available in November 2026. It will provide interested organisations with access to selected scheme, technical and procurement information to support their assessment of the opportunity in advance of procurement launch.

The information is expected to include:

• Scheme and technical information,

• The proposed procurement approach,

• Market engagement materials, and

• Key themes arising from market feedback across the targeted investor and lender engagement, and in-person events.

Any information uploaded by DCWW to the data room will be preliminary and subject to further development. It will not constitute the full procurement documentation. DCWW requirements will only be set out in the procurement documents issued as part of the competition.

Details on how to access the data room will be made available in a future UK3 Planned Procurement Notice.

D. Future Market Engagement

DCWW may undertake additional market engagement activities before procurement launch and will notify the market, as appropriate, of any additional activities and participation arrangements.

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 to or participating in any market engagement activity 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 the market engagement announced in July 2026 can be found in the supporting press release available at: https://corporate.dwrcymru.com/en/news-media/2026/welsh-water-launches-market-engagement-for-largest-infrastructure-investment-in-its-history

Due date

04 November 2026, 23:59PM

Has the engagement period already ended?

No