1 Mar 2005

Interserve, the infrastructure and facilities management group, and its partners in the KMI Plus joint venture have been named by United Utilities as preferred bidder for one of the two places on its Process Partnership Framework Agreement. The framework agreement, known as process partner framework north, will cover the five-year period 2005-2010 and includes water and wastewater process work in the north-west of England.

Interserve's share of the £400 million contract is expected to be around £120 million, with work on the AX4 process partner framework north expected to start on 1st April 2005.

KMI Plus is a joint venture between Kier Construction, Murphy Group, Interserve and Mouchel Parkman. This new contract follows on from the successful KMI contract which has to date successfully delivered £230 million of work under United Utilities' AMP3 capital programme. As before, Interserve's managers and engineers will be seconded to the joint venture to operate alongside colleagues from the other partners and United Utilities. Under AX4 the integrated team will deliver a range of water and wastewater facilities including new build, enhancements, asset renewal and refurbishment.

United Utilities' Steven Beaumont, who has overall responsibility for the company's procurement and investment delivery process, said, "Delivering an investment programme of this scale requires careful management right from the very start.  We've got a significant challenge ahead of us to meet our regulatory outputs and I know that with the right partners in place we will be able to meet our obligations and provide real value for money for our customers here in the North West."

John Vyse, Executive Director of Interserve Plc, commented, "This contract demonstrates the strength of Interserve's capabilities in the water sector. KMI has delivered on all its targets under AMP3 for United Utilities and we are delighted to be part of the KMI Plus partnership in the AX4 programme."

Interserve is very aware of the strategic importance of its work with water companies in these development programmes which are providing customers with long-term, high-quality water supplies and wastewater treatment facilities. It has also recently announced contracts with both Severn Trent and Thames Water worth £150 million.