FTSE 250 construction services provider Galliford Try PLC (LON:GFRD) said its water business has landed a contract with Southern Water.
Galliford has been appointed by Southern Water as a delivery partner for two of the water company’s design and build frameworks.
Starting in 2020 and running for five years, the frameworks have a total value of £425mln and Galliford Try's share of the business is anticipated to be worth roughly £240mln although the actual value of the contract is subject to the final determination of Southern Water's business plan from Ofwat.
The frameworks cover capital investment schemes such as water and wastewater treatment works, upgrades in the western region in a joint venture with Black & Veatch, as well as network schemes including pipelines and pumping stations in both the western and eastern regions in a joint venture with Morrison Utility Services.
The agreement comes as the UK water industry prepares for AMP7, the seventh asset management period overseen by the industry regulator, Ofwat.
Galliford Try has also been appointed to Yorkshire Water's AMP7 frameworks. The total value of the frameworks is £1bn and Galliford Try expects to secure about £100mln of work over the five-year term, with the possibility of a three-year extension to the deal.
Working with design partner GHD, Galliford Try has been allocated to the 'complex civils' framework covering the design, build and refurbishment of clean and wastewater treatment assets, reservoirs and pumping stations.
"The water sector is a key strategic focus for our construction business as set out in our recent results,” said Graham Prothero, the chief executive officer of Galliford Try.