Contract award

Leeds signs a fifty year city centre heat network concession

By Staff Writer  |  05-09-2026

Leeds City Council has published the contract details notice for the Leeds City Centre Heat Network, recording a concession held by Hemiko Limited that was signed on 5 August 2026 and runs to 4 August 2076. The contract value on the notice is 3,405,000,000 pounds excluding value added tax. The notice was published at 3:21pm on 4 September 2026.

The procurement ran as a competitive flexible procedure under the Procurement Act 2023 and the tender record carries the special regime for a concession, so the figure is the value of the whole fifty year term rather than a construction sum. The award is classified as works, and the classification codes on it cover urban development construction work, district heating mains construction work, heating works, and energy and related services. The tender description on the record is short: the network runs to Leeds South.

What the council said when it made the appointment

The council set out the arrangement in March 2026, when its executive board approved the appointment. The new network is being delivered on a different footing from the existing Leeds PIPES scheme, with the council making no financial investment and the company financing, owning, developing, operating and maintaining the pipework. The council keeps influence over customer standards, pricing and the rate at which the network grows.

The first phase is planned for the South Bank. On the council's figures it could connect 28 residential and commercial buildings and reach up to 8,000 residents and other customers. The council has secured 23.5 million pounds of capital grant funding from government for the scheme. Detailed proposals from the company are expected in early 2027, with construction starting soon after if they are approved.

With an initial investment of around £30 million, Hemiko will be delivering the infrastructure that enables this clean and affordable heat to be provided. This will support the council's ambitions for a thriving city-centre hub for people to live and work.

Toby Heysham, chief executive of Hemiko

Two figures sit on this project and they are not the same thing. The contract details notice values the concession at 3,405,000,000 pounds over fifty years. The company's stated initial investment is about 30 million pounds. One is the whole life value of the concession, the other is the money going in at the start.

The network it builds on

The existing Leeds PIPES network has more than 30 kilometres of pipework and connects over 4,100 residential properties, including more than 2,000 council flats, together with 30 public and commercial buildings. It takes heat recovered from the city's non recyclable domestic waste plant. The council puts its carbon saving at over 7,000 tonnes in 2025.

We're pleased to be formally giving the go-ahead to Hemiko for the next phase of the district heat network, which has already been hugely successful through Leeds PIPES in providing lower carbon and more affordable heating to the city.

Councillor Mohammed Rafique, Leeds City Council

What the contract record adds

The notice records the supplier as a small or medium sized enterprise registered in Cumbria. Two signed contract documents are attached to the notice. The contract start date and the signature date are both 5 August 2026, so the notice follows the signature by a month.

For contractors and consultants, the practical point is the shape of the programme rather than the headline number. A concession of this length puts the design, construction, operation and renewal risk on the network owner across five decades, and the buyer's role is set out as an enabling one. The pipeline of work sits with the concessionaire and its own supply chain, not with a council framework.

The notice does not publish a construction start date, a value for the first phase, a breakdown of the fifty year figure between capital and operating spend, or the terms on which the council keeps influence over pricing. It does not name the buildings in the first phase or say when the connection agreements for them will be let. The council's own account of the scheme is dated March 2026, so the position on the detailed proposals may have moved since.