Construction Contract Leads

Scope

Reference

DN793983

Description

Royal Borough of Kingston are conducting this Procurement to select a Development Partner to develop a district heat network in the Kingston Potential Zone Area (the "Network") and, subject to receipt of the necessary approvals, to deliver the Network using the Development Partner's chosen corporate vehicle (the "Project Company"). This is a mixed procurement.

The Network is intended to operate as part of Kingston's strategic and essential utility infrastructure, designed to supply affordable, low‑carbon heat to homes and public buildings. The Network is expected to achieve significant reductions in carbon emissions compared with conventional gas‑based heating, improved local air quality through reduced combustion, and increased use of locally sourced low‑carbon energy. By providing a centralised, efficient heat solution, the Network will support the Authority's ambition to achieve borough‑wide carbon neutrality by 2038 and net‑zero Authority operations.

RBK has already carried out technical and commercial feasibility work that confirms the potential for the Reference Scheme to be a viable, scalable heat network. The Reference Scheme assumes the use of waste heat from the Thames Water Hogsmill Sewage Treatment Works and is planned to connect Cambridge Road Estate, Kingston Hospital, Kingston University's Penrhyn Road campus, and the new Kingston Leisure Centre, with the potential for future expansion into Kingston Town Centre and surrounding areas as Subsequent Phase(s).

The purpose of this Procurement is to appoint a Development Partner to, as a first step, take forward the detailed technical design, advance the commercial and financial modelling (through the delivery of development services under the Development Agreement). The Development Partner will not be required to design the Reference Scheme and can instead deliver another scheme, provided that scheme meets the Mandatory Requirements (as detailed in the Development Agreement). The Reference scheme has a value of £33m exclusive of VAT.

The project adopts the DESNZ AZP 'Golden Share' delivery model, split into two distinct phases:

Phase 1 (Development Services): The successful partner will enter into a Development Agreement (a services contract with a nominal £1 fee) to deliver detailed technical design and financial modelling.

Phase 2 (Project Delivery): Subject to the project passing the "Approvals Gateway," the parties will enter into a Shareholders' Agreement and Articles of Association. This phase is treated as a Concession Contract for the construction, operation, and maintenance of the Network.

If Financial Close occurs, the Authority will enter into a Shareholders' Agreement and establish a single supplier framework. To satisfy framework notice transparency requirements, the contracting authorities and parties listed below are identified as being entitled to award call-off contracts, specifically Connection and Supply Agreements (CSAs), to buy heat and hot water from the Network:

- The Royal Borough of Kingston upon Thames

- Kingston University Higher Education Corporation

- Kingston and Richmond NHS Foundation Trust (formerly Kingston Hospital NHS Foundation Trust)

- Places For People Leisure Management Limited, in its capacity as the operator of the Kingston Leisure Centre on behalf of the Authority.

In accordance with Section 47(3) of the Act, the Authority has set a framework term of 8 years as it considers this longer term is required due to significant upfront capital investment, phased technical design (RIBA Stage 4), and long-term infrastructure delivery cycles. The 8-year term ensures alignment with the project's funding cycle, including the £11m Green Heat Network Fund (GHNF) grant, and provides the commercial stability necessary for the Development Partner to transition through the Approvals Gateway to Financial Close.

In addition, the Authority intends to award the Cambridge Road Estate Connection and Supply Agreement, giving rise to a concession contract, which provides for the supply of heat and hot water from the Network to the Cambridge Road Estate.

To support delivery, the Authority will also enter into:

- A Lease for the Villiers Road site (if required for the Energy Centre).

- A Grant Funding Agreement Variation Deed (or Grant Pass-through Agreement), which facilitates the transfer of the benefit of the Green Heat Network Fund (GHNF) capital grant (estimated at £11m) from the Council to the Project Company to support the construction phase of the Network, subject to compliance with the terms of the original Grant Funding Agreement and subsidy control requirements.

The indicative procurement dates for this opportunity are:

26th May 2026 at 12:00 - Deadline for receipt of PSQ Responses

10th July 2026 - Shortlisted suppliers invited to submit Interim Tender Responses

11th September at 12:00noon - Deadline for receipt of Interim Tender Responses

4th January 2027 - Issue Invitation to Submit Final Tender

8th February 2027 at 12:00noon GMT - Deadline for receipt of Final Tender Responses

30th June 2027 - Assessment summaries & Contract Award Notice issued

31st August 2027 - Contract signature

The Royal Borough of Kingston is requesting that potential Suppliers review and sign a Non-Disclosure Agreement to be able to access the full tender documentation including PSQ, ITT, Contractual Documentation, Lease HoT, and the Data Pack. Potential Suppliers who wish to access the PSQ, along with the full tender information, should sign and return an NDA that can be accessed via the e-tender portal, by following the link from this advert.

Total value (estimated)

• £360,000,000 excluding VAT
• £432,000,000 including VAT

Above the relevant threshold

Contract dates (estimated)

• 1 September 2027 to 31 August 2068
• 41 years

Main procurement category

Works

Additional procurement category

Services

CPV classifications

• 09323000 - District heating
• 42515000 - District heating boiler
• 45211360 - Urban development construction work
• 45232140 - District-heating mains construction work
• 45232141 - Heating works
• 71314000 - Energy and related services

Contract locations

• UKI63 - Merton, Kingston upon Thames and Sutton

Participation

Legal and financial capacity conditions of participation

Financial Capacity - Economic and Financial Standing

Insurance (in place or commitment to obtain before entry into contract)

Legal Capacity (GDPR)

Full details of the Conditions of Participation can be found in the PSQ Guidance Document

Technical ability conditions of participation

Technical ability

Health and Safety

Business Continuity & Resilience

Carbon Reduction Plan and Environmental Management Systems

Modern Slavery

Living Wage

Full details of the Conditions of Participation can be found in the PSQ Guidance Document

Submission

Enquiry deadline

12 May 2026, 12:00pm

Submission type

Requests to participate

Deadline for requests to participate

26 May 2026, 12:00pm

Submission address and any special instructions

https://www.londontenders.org

Tenders may be submitted electronically

Yes

Languages that may be used for submission

English

Suppliers to be invited to tender

Maximum 3 suppliers

Selection criteria:

As set out in the PSQ Guidance document

Award decision date (estimated)

30 June 2027

Award criteria

Other information

Applicable trade agreements

• Government Procurement Agreement (GPA)

Conflicts assessment prepared/revised

Yes

Procedure

Procedure type

Competitive flexible procedure

Special regime

Concession

Competitive flexible procedure description

This Competitive Flexible Procedure will be conducted in five (5) stages that consist of:

Stage 1: Conditions of Participation - Suppliers submit their PSQ Responses, which are evaluated and the 3 (three) highest scoring Suppliers invited to proceed to Stage 2;

Stage 2: Interim Tender Responses - Suppliers submit Interim Tender Responses (involving a Technical, Commercial, Social Value and Legal Submission), which the Authority will review in preparation for Stage 3. The Authority does not intend to further deselect any Suppliers before moving to Stage 3 but will review the Interim Tender Responses with a view to setting the topics for discussion during Stage 3;

Stage 3: Dialogue Meetings - these meetings are intended to discuss and negotiate the terms of the Contractual Documentation and help develop Suppliers' proposals in order that they can prepare a Final Tender Response that is compliant and meets all of the Authority's requirements;

Stage 4: Final Tender Responses - Suppliers are invited to submit Final Tender Responses and the Authority will evaluate in order to identify its Preferred Supplier; and

Stage 5: Preferred Supplier Stage - subject to obtaining all necessary approvals, the Authority will communicate the outcome of the Procurement to Suppliers and proceed with contract award.

The Authority has set Conditions of Participation which a supplier must satisfy in order to be awarded the contract. They relate to the supplier's legal and financial capacity or their technical ability as set out in the PSQ Guidance document.

In the event any of the below-mentioned known risks materialise, the Authority reserves the right to modify the Contractual Documentation in accordance with section 74 of the Procurement Act 2023. The materialisation of these identified risks would prevent the contract from being performed to the Authority's satisfaction as it would fundamentally undermine the Project's commercial viability and decarbonisation targets. These known unknowns include, but is not limited to, as set out in full detail in section 10 of the ITT:

- Delays or technical changes to the Thames Water heat offtake agreement.

- Route redesigns necessitated by Network Rail or Environment Agency approvals.

- Delays or reductions in heat demand from Kingston Hospital and Kingston Leisure Centre.

In the event these risks materialise, the Authority reserves the right to modify the contract (including scope, technical specification, and commercial terms) under Section 74 to ensure project viability.

The Authority reserves the right under section 24 of the Procurement Act 2023 to refine all or any of the award criteria before the invitation of final tenders. The Authority intends to rely on this section to ensure the final criteria are optimally aligned with the commercial and technical solutions developed during the Stage 3 Dialogue meetings. Specifically, the Authority may clarify the sub-criteria and the evaluation guidance to address specific technical risks or commercial structures that are clarified during dialogue. Any such refinement will be applied equally to all remaining tenderers and will not be used in a way that would have resulted in a different outcome at the Stage 1 Condition of Participation stage.

Documents

Associated tender documents

https://www.londontenders.org

Documents to be provided after the tender notice

To ensure transparency, the full tender pack of information will be released at the PSQ stage. The tender pack and Contractual Documentation will be subject to refinement and modification under section 24 or 31 of the Procurement Act 2023.

The Royal Borough of Kingston is requesting that potential Suppliers review and sign a Non-Disclosure Agreement to be able to access the PSQ and the full tender documentation including the Data Pack.

The NDA can be accessed via the e-tender portal, by following the link from this advert.

Technical specifications to be met

https://www.londontenders.org

Please refer to the Mandatory Requirements for the development of a solution that delivers the required carbon performance

Contracting authority

Royal Borough of Kingston Upon Thames

• Public Procurement Organisation Number: PWRN-9366-HZGV

Guildhall

Kingston upon Thames

KT1 1EU

United Kingdom

Email: commissioning [at] kingston.gov.uk

Region: UKI63 - Merton, Kingston upon Thames and Sutton

Organisation type: Public authority - sub-central government

Other organisations

These organisations are carrying out the procurement, or part of it, on behalf of the contracting authorities.

BURO HAPPOLD LIMITED

Summary of their role in this procurement: Project management, technical and commercial support

• Companies House: 02049511
• Public Procurement Organisation Number: PMYR-5199-WHTD

Pinesgate, Lower Bristol Road

Bath

BA2 3DP

United Kingdom

Email: projectleads [at] burohappold.com

Website: https://www.burohappold.com

Region: UKK12 - Bath and North East Somerset, North Somerset and South Gloucestershire

BEVAN BRITTAN LLP

Summary of their role in this procurement: legal support to the project

• Companies House: OC309219
• Public Procurement Organisation Number: PJMX-5523-TXZX

Kings Orchard

Bristol

BS2 0HQ

United Kingdom

Email: tenders [at] bevanbrittan.com

Website: https://www.bevanbrittan.com

Region: UKK11 - Bristol, City of

Contact organisation

Contact Royal Borough of Kingston Upon Thames for any enquiries.

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