Thames Water is to cut IT costs by consolidating an annual £37m outsourcing contract run by two suppliers.

Siemens Business Services and SchlumbergerSema jointly run the day-to-day support and management of the water company's IT systems for internal users in the UK.

But Thames Water says it will streamline the operation under just one supplier when the existing seven-year contract ends next September.

Jim Brown, head of information systems at Thames Water, explained that the contract is difficult to manage with two partners. "It's complex, so we are looking for one point of accountability. IT services are more difficult to manage in a multi-partner environment," he said.

The contract includes IT service desk management, problem call logging and management, maintenance of computer and telecoms hardware and software, management of web services, site maintenance and data centre management and services. Brown expects the new contract to yield significant cost savings and better value within a year.

The new supplier will support the water company's 150 UK sites, which include two mainframes, 130 Novell servers, 110 Windows NT servers, 70 Unix servers, 4000 desktop PCs and 2000 laptops.

The company will draw up a shortlist of six suppliers that will be invited to tender in November. The five-year contract will be awarded next April, ready to take over in September.

Thames Water's contracts with PA Consulting for application development and Wipro Technologies for application support will not change.