Procurement Of A Development Partner For Kingston Potential Zone Area

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 …