Balfour Beatty, Hyder Consulting, Interserve Project Services, Pell Frischmann and South West Engineering staff will continue to work under the existing terms through to 2016/17.

The move will allow a smooth transition through to AM6 from 2015 onwards, when the water company hopes to spend £850m.

The alliance works across South West Water’s operating area in Cornwall, Devon and parts of Somerset and Dorset to upgrade and replace aging water assets, including treatment works, sewers and storm water pipes.

Projects currently being carried out by the alliance include a £3.5m upgrade to sewers and water overflow systems in the heart of Truro; an £18m programme of works to ensure the continued cleanliness of some of Britain’s most popular beaches; and night works in North Devon timed to avoid disruption to the annual book festival and resulting tourist trade.

The alliance is presently worth around £22m a year to Balfour Beatty alone.

Colin Kelly, Managing Director, Balfour Beatty – Gas & Water, said: “Our teams have been carrying out some very technically challenging projects in this area, where the important tourist trade and beautiful natural surroundings mean finding innovative methods to minimise disruption and the impact of operations is especially important.”