28.02.2020
With the latest stage of the Price Review 2019 process now complete, the fact that four companies have rejected Ofwat’s Final Determination and opted instead for a referral to the Competition and Markets Authority gives some indication of the tough challenges the sector as a whole faces as a result of tough targets set by the regulator.
This applies equally to the companies who decided that they could live with Ofwat’s decision rather than face the demands that a CMA referral entails.
The regulator is looking to the water firms in England and Wales to deliver new levels of efficiency and service aimed at transforming their performance over the next five years, at the same time as cutting the average household bill by £50 during the course of AMP7.
Key areas where Ofwat is expecting to see a marked rise in performance include:
- cutting greenhouse gas emissions
- increasing renewable energy
- supply interruptions, bursts, leakage
- minimum 15% reduction in leakage
- fewer supply interruptions, pollution and internal sewer flooding incidents
- reduced water demand—leakage and per capita consumption
- statutory measures—the compliance risk index (CRI) and treatment works compliance
- asset health measures—mains repairs, unplanned outage, sewer collapses, external sewer flooding, sewer blockages, water quality and low pressure
- resilience measures—risks of sewer flooding in a storm and severe restriction in a drought
Water companies look to supply chain to help deliver challenging PR19 performance targets
The supply chain has a critically important role to play in helping the water companies deliver on their plans – and maintaining the health of their existing assets will be key to achieving this.
In recognition of this, last year water and wastewater technology specialists HUBER Technology took a strategic decision to strengthen the scope of its aftersales offering to water sector customers – since then it has been progressing the further expansion of its dedicated Aftersales division.
Kevin Ockwell, Sales & After sales Manager at HUBER Technology believes that a shift away from reactive to planned proactive maintenance activities will be a vital part of the water companies’ toolkit needed to meet Ofwat’s tough targets and continually rising customer expectations.
His view is based on HUBER’s current aftersales activities to meet rising demand from water sector companies – both the water companies themselves and their Tier 1 Alliance partners.
“We are very aware of our customers’ desire to maximise their existing asset base – and the cost and financial pressures they’re operating under.”
“If there’s a problem, we never look at it in isolation. For example, if a piece a of equipment fails we would never dream of saying lets strip it out, throw it away and just replace it with a new one.”
“We will always look upstream and downstream of a problem to identify what caused it in the first place and the potential knock-on effects and problems it leads to further down the line if it’s not correctly addressed.”
In his view, the water companies are increasingly looking towards working with suppliers with dedicated resources and in-house expertise with the ability to deliver asset availability, which works at optimum efficiency.
During AMP7 the pressure will undoubtedly be on the water companies to find cost-effective ways to optimise their daily operational activities – and in the process, minimise the risks of unexpected problems and breakdowns. Unfortunately, these can often be the source of both significant unplanned additional expenditure and significant inconvenience to their customers.
HUBER has a key focus on providing a flexible, highly responsive and rapid service for both planned or reactive works. With the ability to complete the majority of repairs on site, this means reduced operational downtime without the need to set up temporary treatment solutions while an asset is offsite for repair.
However, Kevin Ockwell believes that the companies who carry out regular health checks on their asset base will be best placed to find the operational efficiencies that Ofwat says are needed to deliver a step change in performance during AMP7.
“We can see this with companies we already work with on strengthening their operational and asset resilience by upgrading and enhancing their existing asset base. Those that commit to stretching their assets by extending and optimising the operational lifespan of their equipment can make a real difference to reducing their TOTEX costs.
“Taking a proactive stance on maintenance can ensure they avoid repeated equipment failures which cost significant amounts of money in repairs and temporary replacement hire costs.”
“We never offer short term quick fix solutions – that is of no benefit to either our customers or ourselves in the long run. Our reputation depends on it and we understand that our customers does too. “
For further information on HUBER’s Aftersales growth, please see the following article.
Please contact Kevin.Ockwellhuber.couk for further information.
