SNP ministers are on the verge of handing a massive contract to provide water for Scotland’s public sector bodies to a private water company based in England.
In a move that critics claim would amount to privatisation by the back door, the government is understood to be minded to give the £350m deal to Anglian Water instead of an offshoot of publicly owned Scottish Water.
It is an important early challenge for Nicola Sturgeon because the contract to supply mains water and waste water services to more than 100 public sector organisations was agreed and put out to tender by her last August when she was minister for infrastructure, investment and cities.
At the time she said the Scottish government was “determined to ensure that Scottish Water continues to be a public sector success story”.
It also echoes the controversy over the new Forth crossing in which ministers were criticised when it emerged that much of the budget was being spent outside Scotland, with significant orders for steel to build the span placed in China.
While Business Stream, which is 100% owned by Scottish Water, bid for the work, sources say Anglian Water has come out of the process narrowly ahead based on price.
Now that bidders have learnt of the tender evaluation results there is a 10-day “standstill” period during which the decision can be challenged before the awarding of the contract to service all 32 Scottish councils, NHS hospitals, universities, prisons and other public bodies.
The Sunday Times has been told that intense lobbying is taking place to try to ensure that Business Stream gets the work, with the benefits to the Scottish economy that would flow from that.
So close to a general election, such an outcome would also take pressure off the SNP, which argues that it is the best party to stand up for Scottish interests and which is hoping to win over a large chunk of left-leaning voters who have traditionally backed Labour.
Dave Watson, Scottish organiser at Unison — the country’s biggest trade union — said: “This is essentially the privatisation of elements of the water industry. Once you start introducing market principles you open the door to privatisation of one of Scotland’s best natural assets.
“While this is the billing end of things, the concern inevitably is that this is the thin end of the wedge and would give succour to those who would support outright privatisation.”
Watson, who is also concerned about the potential impact on Scottish jobs, added: “We would urge the Scottish government to do everything in its power to ensure that Scotland’s water is run from Scotland and not East Anglia.”
Scottish Labour’s shadow infrastructure secretary Mary Fee said: “SNP ministers have serious questions to answer about whether so much work is being sent down to England rather than staying here in Scotland.
“If it’s true that SNP ministers are ready to send a multimillion-pound contract out of Scotland, they must come to the Scottish parliament to explain why they have let so many Scots down.”
The Scottish government said an announcement is likely in the next week to 10 days. A spokesman said: “EU procurement rules require that tenders of this size allow a 10-day ‘standstill’ period after bidders learn the tender evaluation results and before public bodies can award the final contract.”
Scottish Water and Anglian Water declined to comment.
More privatisation by the SNP