Technology heavyweights set to grab slice of £12bn smart-meter pie

Hewlett-Packard, O2, IBM and other technology heavyweights competing for lucrative smart meter contracts will be put out of their misery on Wednesday when the government selects its preferred bidders for the scheme.

The chosen contractors will play a key role in developing the UK's much-vaunted smart grid project, an £11.7bn programme which aims to install smart meters showing how much gas and electricity is being used into the country's 30 million homes between 2015 and 2020.

The Department of Energy & Climate Change will dish out a series of multi-million pound contracts midweek, the biggest of them for a Data Services Provider and a Communications Services Provider.

The DSP contract will require the preferred bidder to handle all the data generated by the project and is thought to be between HP, IBM and CGI (formerly known as Logica).

Meanwhile, the CSP contract, to install and run the communications technology that will form the backbone of the grid, is understood to have a shortlist of O2, Arqiva, the communications group controlled by Canadian and Australian investors, Airwave and a collaboration of Vodafone and Silverspring.

Another, smaller, contract for a data and communications company is essentially a procurement role that is expected to be won by the outsourcing firm Capita.

A Decc spokesman declined to comment on the bidders in the process. The winners are not expected to be announced until September.

The government hopes that, despite the huge investment costs, the smart grid scheme will bring a "net benefit" of £6.7bn.