Dŵr Cymru Welsh Water has announced the next stage of its Cwm Taf Water Supply Strategy, the largest infrastructure investment in the company’s history.

The major investment of more than £500m will modernise drinking water services across South Wales by replacing ageing water treatment facilities, increasing water storage capacity and strengthening the resilience of supplies for over 400,000 of Welsh Water’s three million customers.

As part of the next stage of the project, Welsh Water is inviting infrastructure investors, lenders and engineering partners to help shape the commercial and procurement approach before formal procurement begins under Ofwat’s Direct Procurement for Customers (DPC) model.

The market engagement programme will help ensure the project benefits from the strongest possible commercial arrangements, attracts world-class expertise and delivers long-term value for customers, communities and the environment.

Ruud Haket, interim chief asset officer said: “The Cwm Taf Water Supply Strategy is a once-in-a-generation investment that will secure resilient drinking water supplies for South Wales for decades to come.

“We’re looking to work with organisations that share our ambition to deliver high-quality infrastructure that benefits our customers, supports our communities and protects the environment.

“This market engagement is an important first step in building those partnerships and ensuring we develop a delivery model that attracts the very best expertise and investment available.”

The Cwm Taf Water Supply Strategy includes:

• Construction of a new water treatment works at Dan-y-Castell Farm, Merthyr Tydfil
• A new pumping station at the existing Pontsticill Water Treatment Works
• Upgrades to Llwyn-onn Water Treatment Works
• The future decommissioning of the existing treatment works at Pontsticill and Cantref, both of which were originally built almost a century ago

The market engagement programme, managed by Efficio Consulting, will take place in two phases. The first will involve targeted discussions with investors and lenders to test the project’s financeability and bankability. The second phase will broaden engagement to include Tier 1 delivery partners to validate the proposed commercial and procurement model.

The engagement will help refine the procurement approach before key governance decisions are taken and ahead of procurement commencing in early 2027.

Following statutory pre-application consultation undertaken in 2025, Welsh Water expects to submit planning applications later this year. Click here for more details on the strategy.