The CAP has been procured using Ofwat’s new Direct Procurement for Customers (DPC) approach. Under the DPC approach, Ofwat requires the appointment of a Consultant to protect customers in relation to the DPC project to obtain assurance around the costs and delivery of a DPC project.

United Utilities views the role of the Consultant as crucial to ensure objective, independent oversight of costs that may be passed on to customers and to provide robust scrutiny and assessment of the CAP’s

management of project costs and delivery. The Consultant will act as an independent party to the water company, the CAP, and Ofwat, and will therefore owe a duty of care to all three parties.

The services to be provided by the Consultant include:

(a) the performance of the duties and roles assigned to the Consultant under the HARP Project Agreement

(b) those required of the Consultant by or for the purposes of UU's Statutory Licence, the DPC Allowed Revenue Direction, the DPC Designation or Ofwat, including in terms of assurance and reports

(c) associated services such as:

(i) the assessment of the CAP's allowable construction costs, programmes and any claims for Project Compensation Events, throughout the construction (and defects) period;

(ii) certifying the completion and readiness of each of the sections; and

(iii) the provision of quarterly assurance reports to Ofwat and UU.

The Agreement is anticipated to be in place for 11 years however, it will be in place for the time that is necessary for the Consultant to fulfil its duties until completion of the CAP construction works and any subsequent cost reconciliation.