Competition hots up for utilities e-procurement site

The site, intended to allow utilities to purchase goods and services, will be in direct competition with a procurement site being planned by Scottish Power, United Utilities and Northern Electric, which was made public last month.

Backers of the latest site include Anglian Water, PowerGen, South West Water, Yorkshire Water, GPU Power Distribution and the Environment Agency.

The potential markets to be opened by the internet sites is huge, with contracts supplying Scottish Power alone worth £1.5bn.

Reports in today’s Financial Times had industry experts claiming the sites could cut the costs of the utilities between eight and 15%.

Colin Maund, director of UK operations at Achilles Information, a supplier of contract information that helped bring the latest group together, said: ‘Companies could buy goods such as pipes, valves and cables as well as basic office products such as computers using the exchange.’

SAP, the German software house is to provide the systems to run the exchange proposed by the new group.

Reports say £10m in being sunk into the exchange with both SAP and Achilles retaining a stake.

The procurement site herald what many analysts are saying could be the beginning of a wave of new exchanges.

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