UK-based construction firm Laing O’Rourke has been selected as preferred bidder to develop the turbine house and sluice gate structure for the power-generating £1bn tidal lagoon project in Swansea Bay.

The contract is worth £200m. It will involve delivery of a 410m turbine house and sluice structure block at the lagoon.

Arup will be co-ordinating with the firm for the design and engineering works for the project.

The firms are expected to source concrete, reinforcing and other materials for the construction locally.

Tidal Lagoon Power Engineering and Construction director Andrew McNaughton said: “Announcing that Laing O’Rourke is joining the team is a major step forward for the project.

“As preferred bidder, their contribution over the next few months, alongside General Electric and Andritz Hydro, will be invaluable in preparing for delivery on site in 2016.”

The project will house 16 underwater turbines to produce and supply renewable power for 155,000 households in the UK, over 120 years.

Tidal Lagoon Swansea Bay intends to sign a fixed price contract for the main build after advanced works and value engineering for the tidal project is completed.

Tidal Lagoon Swansea Bay has also floated tenders for packages concerning marine works and public realm ancillary works for the project, the results for which are soon to be announced.