Severn Trent Joint Venture Wins $1.9 Billion Contract from UK Ministry of Defense

A joint venture of Severn Trent and Costain, Coast to Coast Water Ltd. (C2C), has been awarded a contract by the United Kingdom's Ministry of Defense (MOD) to deliver water and wastewater services to approximately 1,500 MOD sites throughout southeast, east and north England.

The 25-year contract known as Project Aquatrine is valued at $1.9 billion.

Project Aquatrine is the first major public-private partnership in the UK water sector in which water and wastewater services will be provided for a diverse and widely dispersed area outside of the regulated water industry. The contract calls for the transfer of responsibility for the maintenance and operation of the MOD's water and wastewater assets to the private sector while the MOD concentrates on its core defense activities.

Various forms of public-private partnership for water and wastewater systems are being facilitated throughout the U.S. Severn Trent is a leader in this arena, operating facilities under agreements with municipalities at 600 locations. The Project Aquatrine contract, culminated after years of effort, establishes Severn Trent as a major global participant in the advancement of public-private partnerships.

Ian Andrews, second permanent under-secretary at the Ministry of Defense said, "In signing this agreement we formalize a relationship that has already developed between the Ministry of Defense and Coast to Coast Water Ltd. We look forward to a successful long-term partnership, which will bring private sector expertise and capital into the management of the Department's water and wastewater infrastructure."

Severn Trent Services chief executive, and C2C Chairman, Len Graziano stated, "It is a great pleasure and privilege to enter into this agreement that puts the seal on the 25 year contract under which we will deliver water and wastewater services to the Ministry of Defense. The contract sets out the goal to be a mutually beneficial partnering arrangement that delivers important water services in a safe and environmentally responsible way."

The operations are scheduled to start in April 2005.


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