Client profile: British Waterways

But over the past decade, canals have come back into Britain's urban and rural regeneration plans and on to property developers' menu of desirable sites. In the late 1980s, as part of a trend towards waterside living, canal sites began to attract a 15% premium. That trend was crystallised by Birmingham's successful Brindleyplace development, which is criss-crossed by a canal network. In 2000, the government recognised that canals were a "catalyst for urban and rural regeneration", and increased its funding of repair and maintenance work.

One of the figures behind the renaissance of the waterways is Bill Schagel, a Scot with a civil engineering background who is technical director at British Waterways. His plans for regeneration are about to go into overdrive: over the next five to 10 years, more than £300m is to be invested in nine canal restorations and new waterways (see box). The proposals cover 100 miles of waterways and even include proposals for Britain's first new canal in more than 100 years.

The programme is ambitious, but forms only the starting point of British Waterway's vision for the future. The group wants to use the restorations as a launch pad for wider regeneration projects that will be led by joint-venture companies set up by British Waterways.

Schagel stresses that the plans are a continuation of his outfit's renewal programme – £2bn has been invested on the waterways in the past 10 years and 220 miles of canals are due to be opened this year after the completion of seven major restorations projects, including the Falkirk Wheel in Scotland.

To get this programme rolling, Schagel and his team need partners. British Waterways provides some of the income through its commercial businesses and English Heritage, the Lottery Fund and the Waterways Trust, a charitable organisation, also provide support. But British Waterways is also looking to form partnerships with developers from the private sector.

Canal restoration, Schagel says, should be considered as part of a broader and more integrated approach. What is being increasingly well understood is that waterways reflect and amplify their environments. As Schagel put it: "They magnify an area's prosperity – and likewise magnify a place's neglect." He is looking for high-quality contractors and consultants to "create the kind of excitement" that will draw people and investors to waterways.

The development model here is the Falkirk Wheel, which has used imaginative engineering to raise the profile of canals in Scotland. "We envisage similar special projects in the future – they could well be a result of one of the new restoration projects. For example, the Bedford and Milton Keynes canal will require a "boat lift" to tackle a hill – that's a real challenge," he says.

It's obvious that Schagel is passionate about innovative design. "We are not looking for pastiche. Buildings should create a new sense of space. We are looking for innovation and excitement. One of our designers has a concept for a glass bridge, which is very exciting. We just need to find the right context."

We are looking for innovation and excitement. One of our designers has a concept for a glass bridge. We just need to find the right context

British Waterways will advertise the restoration projects to contractors and developers through the European Union's Official Journal and is likely to procure on a design-and-build basis. Schagel says the group likes to keep control over a project's development and the time-plan and funding arrangements. "We are also experienced at dealing with statutory process for procuring large public works," he adds.

So does Schagel have any frustrations about his dealings with contractors? "When we were procuring the Falkirk Wheel, we came up with an exemplar design. We said this is our idea – can you do better? The contractors found it difficult to break out of the initial concept. They stuck to it – and costed and estimated it. So we at least had a good idea of the project's cost. Post-tender, the two shortlisted contractors started to do much better and, in the end, Morrison won." The message to contractors is: listen carefully to the client's demands and use your imagination.

Aside from the restoration projects, British Waterways spends £60m, all public funds, on its maintenance programme. Some small contracting jobs are advertised on Achilles, the government's tender database, but most work is done by three contractors on a partnering basis. Morrison, Galliford Try and Dew Construction are the firms in question, although those contracts are being renegotiated and a fourth partnering place is up for grabs. "Because of the increase in our maintenance work since the last comprehensive spending review allocated us more funds, we are looking for another partner – and the new contracts will last for five years," says Schagel.

He believes in the partnering process because it encourages contractors to reinvest. "We cost each element of work,'' he explains. "If the contractor can bring about a cheaper result then we share the saving – we share the pain and gain."

After its involvement in large regeneration schemes – such as the commercial developments at Paddington Central and Paddington Basin, and the residential schemes at Brentford Lock in Greater London and Britannia Basin in Manchester – British Waterways is looking to set up more joint-venture companies with the private developers. Last December, the group created its largest property public–private partnership so far with Amec Developments and Igloo Regeneration Fund, which will develop 10 canalside sites. The list of sites will be revealed late this year, but there has already been considerable speculation in the local press that the proposed £1.4bn mixed-use development at Nottingham Riverside (see box) will be on it.

Schagel says he envisages similar joint-venture companies being set up in the future and a growing list of target development sites. "A new joint venture may come about as a result of one of the restoration projects. We provide the corridor of confidence – places where people want to be – and investment follows," he says.

Schagel says before a project gets near lift-off it first needs commitment from local people. "You've got to build enthusiasm – a momentum for regeneration projects. We then provide that vision to the developer. Without inspiration nothing gets done." It is these large investments that will help finance the future maintenance of waterways, Schagel stresses. "We're thinking about 200 years down the line. We've moved up a gear in our regeneration programme, but this is still just the beginning."