Severn Trent Launches Water £1.2bn Tunnelling Tender

Why It Matters

The framework delivers a major infusion of capital into the UK water‑infrastructure sector, creating long‑term opportunities for specialist contractors and accelerating network resilience upgrades.

Key Takeaways

• £1.2bn framework for tunnelling, drilling, shaft works.
• Design‑and‑build lot valued at £900m, build‑only £300m.
• Framework runs Sep 2026‑Sep 2038, extendable to 2041.
• 5‑7 contractors per lot, 70:30 technical‑price split.
• Covers all England and Wales regions.

Pulse Analysis

Severn Trent Water has opened a £1.2 billion framework to deliver tunnelling, drilling and shaft works across England and Wales. The programme, scheduled to start in September 2026 and run through September 2038 with a possible three‑year extension, forms part of the utility’s long‑term strategy to modernise ageing water mains and improve resilience against climate‑induced flooding. By consolidating both build‑only and design‑and‑build contracts under a single procurement, the company aims to streamline delivery, reduce disruption and secure the expertise needed for complex underground construction.

The tender is split into two lots: a £300 million build‑only package and a £900 million design‑and‑build package, each inviting five to seven qualified firms. Bidders must demonstrate proven tunnelling capability and will be judged on a 70:30 technical‑price split at award, narrowing to 60:40 for individual call‑offs. Running under the Procurement Act 2023 competitive flexible procedure, the framework allows mini‑competitions and limited direct awards, giving Severn Trent flexibility to match specific project requirements while maintaining rigorous cost control.

The announcement signals a robust pipeline of work for the UK’s underground construction sector, where skilled contractors are in short supply. With the framework covering all major regions—from the North East to Wales—companies that secure a lot will gain sustained revenue streams and the opportunity to innovate in pipe‑ramming, micro‑tunnelling and shaft underpinning techniques. For investors and policymakers, the tender underscores the growing emphasis on resilient water infrastructure and the strategic role of public‑private partnerships in delivering large‑scale, high‑value civil engineering projects.