{"id":531303,"date":"2025-10-30T09:17:03","date_gmt":"2025-10-30T09:17:03","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=531303"},"modified":"2025-10-30T09:17:03","modified_gmt":"2025-10-30T09:17:03","slug":"water-water-everywhere-2","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/sponsored\/water-water-everywhere-2-30-10-2025\/","title":{"rendered":"Water, water everywhere"},"content":{"rendered":"

Some of the biggest construction projects in the coming years will be floated in the water infrastructure industry. But what are the risks water companies need to be aware of?<\/strong><\/em><\/p>\n

The water industry is gearing up for its biggest ever programme of investment, with more than \u00a3100bn earmarked to revamp infrastructure in England and Wales over the next five years. But the funding comes at a time of intense pressure in the sector, where expectations to deliver on time, on budget and in line with regulatory requirements have never been higher.<\/p>\n

The eighth asset management period (AMP8), which runs from 2025 to 2030, opens the door to a much-needed modernisation of ageing infrastructure while strengthening the long-term resilience of water supplies in the face of climate change and population growth.<\/p>\n

But significant challenges lie ahead, not least the requirement to meet increasingly stringent environmental obligations against a backdrop of financial fragility in the water industry.<\/p>\n

At the heart of AMP8 lies the commitment to achieve net zero operational emissions by 2030, along with a significant reduction in the frequency and volume of sewage spills from storm overflows. Water companies, also required to deliver at least a 10 per cent increase in biodiversity, are turning to innovative nature-based solutions such as wetlands and rain gardens to meet their obligations.<\/p>\n

Zoe Channon, director of business development and partnerships at Surrey Wildlife Trust, believes there is a growing understanding that major public infrastructure projects, or any other new development, will be more successful if they work with, rather than against, nature.<\/p>\n

\u201cHealthy rivers, wetlands [and] woodlands play a vital role in regulating temperature, protecting against fire and flood, reducing pollution and enhancing physical and mental health,\u201d she says. \u201cIt is not just desirable but essential that both government and the private sector take responsibility to firstly avoid and then minimise impacts on nature, ensuring unavoidable impacts are substantially compensated for by habitat creation and enhancement that is well planned, properly monitored and effectively enforced.\u201d<\/p>\n

The trust is pressing for a minimum 20 per cent uplift in biodiversity over the original baseline, which it sees as an achievable target. \u201cBiodiversity net gain, while not always a perfect vehicle, represents a significant step forward in securing and delivering sustainable outcomes which support long-term economic and social growth and resilience,\u201d says Channon.<\/p>\n

The transformation of the water industry under AMP8 is taking place amid concerns over the financial resilience of both water companies and their contractors, with a string of high-profile collapses serving as a major wake-up call. The latest official data from the Insolvency Service shows a slight increase in construction firm insolvencies, and the number of failures remains above pre-pandemic levels.<\/p>\n

Matt Cullum, head of UK construction at insurance broker Willis, believes the threat of supply chain collapses represents a major risk in the water industry. \u201cWith margins being so tight, contractors are really working up against the wire,\u201d he says.<\/p>\n

Strategic insurance<\/h3>\n

The uncertainty of the operating environment has turned insurance from a backstop to an increasingly important strategic tool.<\/p>\n

However, he warns that the traditional approach of relying on insurance purchased by individual contractors puts major projects at risk as the coverage may stop as soon as that firm\u2019s involvement in the job comes to an end. \u201cIf a defect occurs from a previous contractor, that\u2019s not going to be covered \u2013 it will be on the head of the water company,\u201d says Cullum.<\/p>\n

As a result, there has been a growing appetite in recent years for owner-controlled insurance programmes (OCIPs), which offer greater control over delivery timescales and protection of capital investment.<\/p>\n

While contractor-controlled programmes tend to be limited in scope, covering only the contractor in question and any subcontractors they appoint, OCIPs are designed to provide comprehensive cover for all the key parties from start to finish.<\/p>\n

According to Cullum, the owner-controlled model offers significant advantages to water companies in an increasingly risky operating environment. \u201cYou have the benefit of controlling the loss ratio \u2013 you are not relying on a contractor\u2019s policy which may have limitations under it as a result of external losses,\u201d he says. \u201cThe water company is in control of it from day one and if something\u2019s not going right, [we] will work closely with them to understand the issues and how they can be rectified in real time.\u201d<\/p>\n

Contractors also stand to benefit as any claims made will not affect their own insurance. \u201cIt reduces their exposure to loss or worsening loss ratio under insurances because the risk is taken away,\u201d he says.<\/p>\n

Firms also gain from a reduced administrative burden and, in many cases, better coverage under the policy than they would have been able to secure on their own.<\/p>\n

\u201cWe recommend OCIPs that cover employers, contractors and subcontractors from day one,\u201d says Cullum. \u201cWith Willis already advising six of the UK\u2019s top 10 water companies, we have a deep understanding of the sector\u2019s risks and are well placed to design programmes that deliver real resilience.<\/p>\n

\n

Aglian Water\u2019s AMP8 programme<\/strong><\/p>\n

Anglian Water has set out its approach to delivering its \u00a311bn AMP8 programme, recognising risks from supply chain pressures, labour shortages and programme complexity. The company is addressing these through optimised planning, early supplier engagement, and workforce development, including training initiatives such as the @One Training Academy. It has also appointed a joint venture between AtkinsR\u00e9alis, Mace and Turner & Townsend as programme delivery partner to manage capital programmes.<\/p>\n

Projects include two new reservoirs in the Fens and Lincolnshire, designed to supply 750,000 homes and support regional growth. Anglian is also constructing one of Europe\u2019s largest environmental schemes: a strategic pipeline network from North Lincolnshire to Essex. These projects are central to averting a projected 600 million litre daily water shortfall by 2050.<\/p>\n

Contractor solvency is being managed through a \u00a31bn, 15-year delivery model, designed to ensure stability across multiple AMP periods. Regulatory demands have shaped a plan that doubles environmental investment, replaces over 1,000km of mains, and fast-tracks wastewater improvements, supported by 200 additional staff. Climate resilience and net-zero goals underpin delivery, with SuDS, wetlands and catchment partnerships embedded in design. Anglian Water positions AMP8 as a once-in-a-generation investment to secure long-term water resilience.<\/p>\n<\/div>\n

\"\"<\/em><\/p>\n

 <\/p>\n

 <\/p>\n

For more information, visit our website<\/a> or contact:<\/em><\/p>\n

Matt Cullum
\nT: +44 7921 864 990
\nE: matthew.cullum@wtwco.com<\/p>\n

James Pearce
\nT +44 7823 901459
\nE: james.pearce2@wtwco.com<\/p>\n","protected":false},"excerpt":{"rendered":"

Some of the biggest construction projects in the coming years will be floated in the water infrastructure industry. But what are the risks water companies need to be aware of? The water industry is gearing up for its biggest ever programme of investment, with more than \u00a3100bn earmarked to revamp infrastructure in England and Wales …<\/p>\n","protected":false},"author":1,"featured_media":531308,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[593],"tags":[],"class_list":["post-531303","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sponsored"],"yoast_head":"\nWater, water everywhere | Construction News<\/title>\n<meta name=\"description\" content=\"Some of the biggest construction projects in the coming years will be floated in the water infrastructure industry. 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