THE WATER INDUSTRY (SPECIFIED INFRASTRUCTURE PROJECTS) (ENGLISHUNDERTAKERS) REGULATIONS 2013

Thames Tideway Tunnel Project: Regulation 6(8) Notice 2015

21 August 2015

In exercise of the powers conferred by regulation 6(8) of the Water industry (Specified InfrastructureProjects) (English Undertakers) Regulations 2013 (SI 2013/1582) (the "SIP Regulations"), the WaterServices Regulation Authority (the "Authority") issues this Notice to dis-apply, to the extent set out inthis Notice, the obligation imposed by virtue of regulation 6 of the SIP Regulations for the LicensedInfrastructure Provider to apply certain provisions of the Utilities Contracts Regulations 2006 (the2006 Regulations"), as modified by the SIP Regulations, in relation to the Thames Tideway Tunnel

Project or any part of it.

Nothing in this Notice shall prevent any further exercise by the Authority of its powers under regulation6(8) of theSIP Regulations at any time on or after the date of this Notice.

Citation, commencement and application

1 This Notice:

(a) may be cited as the Thames Tideway Tunnel Project Regulation 6(8) Notice 2015;

(b) takes effect on 24 August 2015; and

(c) remains in force until withdrawn by the Authority.

Interpretation

2 In this Notice:

"Incumbent Undertaker" means Thames Water Utilities Limited;

"Licensed Infrastructure Provider" means the Infrastructure Provider which is the holder for the timebeing of the project licence granted under section 17FA of the Act in respect of the Thames TidewayTunnel Project;

"Relevant Threshold" means the amount expressed in Article 16(a) or (b), as the case may be, ofDirective 2004/17/EC (as may be amended from time to time) and, from the coming into force of anyRegulations which implement Directive 2014/25/EU into the law of England and Wales, the amountexpressed in Articles 15(a) or (b), as may be the case, of that Directive (as may be amended from timeto time). The value in pounds sterling of any amount expressed in euro in Article 16 of Directive2004/17/EC or Article 15 of Directive 2014/25/EU shall be taken to be the value for the time beingdetermined by the European Commission for the purpose of that provision and published from time totime in the Official Journal of the European Union;

"Relevant Time" means the date on which a contract notice would be sent to the Official Journal of theEuropean Union if the requirement that there be a call for competition applies pursuant to the SIPRegulations (by reference to regulation 16 of the 2006 Regulations);

"Thames Tideway Tunnel Project" means the specified infrastructure project described in schedule 1to the Thames Tideway Tunnel Project Specification Notice; and

"Thames Tideway Tunnel Project Specification Notice" means the notice made by the Secretary ofState on 4 June 2014, pursuant to regulation 4(1) of the SIP Regulations, specifying the ThamesTideway Tunnel Project as a specified infrastructure project.

Except as otherwise provided in this Notice, words and expressions used in the SIP Regulations andthe Water Industry Act 1991 (as modified and applied by the SIP Regulations) (the "Act") which areitalicised have the same meaning in this Notice as they have in the SIP Regulations and the Act.

Regulation 6 of the SIP Regulations

3 Regulation 6(8) of the SIP Regulations provides that in the circumstances set out in regulation6(2) of the SIP Regulations, the provisions of the 2006 Regulations as set out in the first columnof the table in Part 1 of Schedule 2 to the SIP Regulations apply, subject to the modifications setout in the second column of the table in Part 1 of Schedule 2 to the SIP Regulations, in relationto any licensed infrastructure provider,unless the Authority otherwise allows by notice.

4 Accordingly, pursuant to the powers conferred by regulation 6(8) of the SIP Regulations and

having regard to:

(a) the fact that:(i) the Thames Tideway Tunnel Project is a specified infrastructure project for the

purposes of regulation 4 of the SIP Regulations;

on 13 August 2015, the Authority designated Bazalgette Tunnel Limited (companynumber 9553573) as the infrastructure provider for the Thames Tideway TunnelProject by virtue of the notice issued by the Authority pursuant to regulation 8(1) ofthe SIP Regulations, such notice coming into effect on 14 August 2015; and

(iii) the Authority granted a project licence to the Infrastructure Provider for the ThamesTideway Tunnel Project pursuant to the powers under section 17FA of the Act on21 August 2015, with theproject licence due to come into effect on 24 August;

(b) the underlying aims of the SIP Regulations; and

(c) the general duties imposed on the Authority by virtue of section 2 of the Act,

the Authority gives this Notice to dis-apply the applicable modified provisions of the 2006

Regulations in the circumstances listed in paragraph 5.

5 In accordance with paragraph 4, the applicable modified provisions of the 2006 Regulations

shall be dis-applied:

(a) In respect of the contracts listed in Schedules 1 and 2 to this Notice;

(b) Where the Licensed Infrastructure Provider seeks offers in respect of a supply contract, aworks contract or a services contract (as those terms are defined in regulation 2 of the2006 Regulations), where the estimated value of the contract is below the RelevantThreshold at the Relevant Time. For the avoidance of doubt, the Relevant Thresholdapplicable where the Relevant Time occurs prior to 31 December 2015, shall be those

figures listed in Schedule 3; and

(c) Where the Licensed Infrastructure Provider seeks offers in respect of a proposed contractas set out in regulations 6(i), 6(j), 6(k), 6(l), 6(m) and 6(o) of the 2006 Regulations. Forthe purposes of this sub-paragraph, Regulation 6 of the 2006 Regulations shall be

considered to be modified as follows:(i) the term "utility" shall be understood to mean "Licensed Infrastructure Provider";

and(ii) in respect of Regulation 6(l), the following shall be considered to be omitted: ",

except where these Regulations apply by virtue of Part T of Schedule I (seeparagraph 23(d) in the second column of that Schedule)".

(ii)

6 For the purposes of determining the estimated value of the contract to be applied in accordancewith paragraph 5(b), the Licensed Infrastructure Provider shall comply with the provisionscontained in regulation 11(4) to 11(18) (with the exception of regulation 11(12)) of the 2006Regulations (together with any case law interpreting those provisions or the equivalentprovisions of Directive 2004/17/EC which they implement), subject to the followingmodifications:

(a) "utility" shall be taken to mean the Licensed Infrastructure Provider;

(b) "paragraph (1)" shall be taken to mean for the purposes of determining the contracts towhich the 2006 Regulations are dis-applied in accordance with paragraph 5(b) of thisNotice;

(e) "paragraph (2)" shall be taken to mean the Relevant Threshold as defined in paragraph(2) of this Notice;

(d) references to "dynamic purchasing system" shall be disregarded; and

(e) references to the "relevant time" shall have the same meaning as "Relevant Time" in thisNotice.

7 The Licensed Infrastructure Provider shaH not enter into separate contracts with the intention ofavoiding the application of the obligation imposed by virtue of regulation 6 of the SIPRegulations.

8 In accordance with section 195A of the Act, a notice stating the reasons for this decision shallbe published as soon as reasonably practicable after the making of this Notice.

Repeal and re-enactment

9 In the event that the 2006 Regulations are repealed and replaced by new Regulations whichimplement Directive 2014/25/EU into the law of England and Wales, references in this Notice toprovisions in the 2006 Regulations shall be construed, where appropriate, as being referencesto the equivalent provisions in the new Regulations. Where the new Regulations makeconsequential amendments to the SIP Regulations, references in this Notice to provisions in theSIP Regulations shall be construed, where appropriate, as being as references to thoseprovisions as amended.

Signed

tc..e...z.m.._ ri.,,,,

on behalf of The Water Services Regulation Authority

21 August 2015

Schedule *I

The Thames Tideway Tunnel Project Regulation 6(8) Notice 2015 applies to the following contractswhich have or will be procured by the Incumbent Undertaker and entered into or will be entered into bythe Infrastructure Provider or will be procured and entered into by the Incumbent Undertaker and

novated to the Infrastructure Provider:

OJEU Reference ifapplicable

Contract

C415 - Main WorksContract — East

C410 - Main WorksContract - Central

2013/S 145-252648

2013/S 145-252648

2013/S 145-252648C405 - Main WorksContract - West

2014/S 201-356028C489 - SystemIntegrator Contract

2014/S 026 — 041968C425 — AccessControl and SecurityFrameworkAgreement

2014/S 026-041951C430 - OccupationalHealth ServicesFrameworkAgreement

2014/S 76-134283IndependentTechnical AdvisoryService

Parties to contract

r (1) Bazalgette Tunnel Limited;

(2) Costain Limited;

(3) Bachy Soietanche Limited; and

(4) Vinci Construction Grands Projects(together, jointly and severally, anunincorporated joint venture)

(1) Bazalgette Tunnel Limited;

(2) Laing O'Rourke ConstructionLimited; and

(3) Ferrovial Agroman (UK) Limited(together, jointly and severally,an unincorporated joint venture)

(1) Bazalgette Tunnel Limited;

(2) BAM Nuttall Limited;

(3) Balfour Beatty Group Limited; and

(4) Morgan Sindall plc (together, jointlyand severally, an unincorporated jointventure)

(1) Bazalgette Tunnel Limited; and

(2) AMEY OWR Limited

(1) Bazalgette Tunnel Limited; and

(2) 34S Security ServicesLimited

(UK)

(1) Bazalgette Tunnel Limited; and

(2) Duradiarnond Healthcare Limited

(1) Bazalgette Tunnel Limited;

(2) Secretary of State;

(3) Water Services Regulation j

Authority;

(4) Thames Water Utilities Limited;and

(5) Mott MacDonald Limited

Contract

Project ManagementContract

ManagementServices Agreement

Date

24 August 2015

August 2015

Schedule 2

Parties

(1) Bazalgette Tunnel Limited; and

(2) CH2M Hill United Kingdom

(1) Thames Tideway Tunnel Limited;and

(2) Bazalgette Tunnel Limited

Schedule 3

Sterling equivalents of the Relevant Thresholds where offers are sought prior to 31 December

2015

For the purposes of paragraph 2 of this Notice, where the Licensed Infrastructure Provider seeksoffers prior to 31 December 2015, the following are the applicable sterling equivalent figures of theRelevant Threshold:

(a) £345,028 for a supply or a services contract; and

(b) £4,322,012 for a works contract.