Northern Ireland Water (NI Water) has paid £28 million to acquire four treatment works from Kelda Water Services (KWS), which produce nearly 50 per cent of the treated water in Northern Ireland.
Government-owned NI Water describes the purchase as a “strategic move” as it will bring all clean water production in the country back under its control.
The move followed the decision by Kelda Group to put the non-regulated businesses of KWS up for sale. This included the Project Alpha Public Private Partnership (PPP) contract operated by KWS, the UK’s largest water PPP, set up in 2006 to help NI Water hit EU Drinking Water Quality Standards.
NI Water chairman Len O’ Hagan said: “We are pleased to announce the completion of the purchase of the Project Alpha companies. This brings back into NI Water ownership all clean water production in Northern Ireland. This represents a strong fit with NI Water’s strategy to provide clean safe drinking water to our customers and to do so in a way that secures efficiencies for our customers and for the public purse.”
In addition to paying £28 million to acquire all the equity in the project from KWS, NI Water will also take on the responsibility for associated debt finance, reported to be around £80 million.
The company said the acquisition will allow it to generate value from the project, which will result in reduced water tariffs for customers and “further efficiencies” for NI Water.
Sara Venning, chief executive of NI Water, said: “A strong dedicated local team of approximately 30 staff operates project Alpha and we look forward to working with them even more closely as part of the NI Water group.
“The completion of the sale with the support of both the Department for Infrastructure, and the Department of Finance (DoF) will allow us to continue to improve the service we provide and the cost at which it is provided to all our customers.”
Peter May, permanent secretary at the Department for Infrastructure, added: “When Kelda took on this contract in 2006, there was a need for substantial investment to upgrade the treatment of water to meet EU standards which was over and above what government was able to commit to at that time.
“When the opportunity arose to bring the contract back into government, the department, in consultation with NI Water and DoF, carefully considered the value for money against the benefits to be gained. The outgoing minister indicated that where affordability and value for money were proven, purchase of the contract could proceed.”
Kelda Water Services confirmed NI Water as its preferred bidder in July 2017. The acquisition completed this month.
The four plants, previously part of Kelda’s non-regulated businesses, include Dunore Point (Antrim), Ballinrees (Coleraine), CastorBay (Craigavon) and Moyola (Magherafelt).