WET News

MAY "The challenges facing the water sector are profound, long-term and global. Innovation is vital to meeting the challenge of significant leakage reduction. That is why it is so important to see companies across the world pooling resources and ideas" Ofwat's John Russell on the launch of the World Water Innovation Fund 8% Projected costs on the Thames Tideway Tunnel have risen 8 per cent, from £3.52 billion to £3.8 billion, with 40 per cent of construction work now completed £14.6M The joint venture between Galliford Try and Morrison Utility Services has been awarded a £14.6 million contract by framework client Southern Water to lay a 10km pipeline in West Sussex "The framework supports our enhanced assurance approach, which is aimed at providing specialist, targeted assurance to meet the challenging needs of AMP7" Yorkshire Water's Paul Robins following the award of Assurance Framework contracts to Atkins and an Arup-Costain JV "We are delighted to deliver these essential services for Southern Water and will look to deliver an excellent service for its customers" J Browne's Stuart Welsh after the company secured the water service reservoir maintenance framework with Southern Water, which runs for an initial four years IN A NUTSHELL 2 WET NEWS MAY 2019 | wwtonline.co.uk "Our results in 2018 demonstrate the achievements across the business against the targets in our strategic plan and provide a solid platform for further progress" nmcn CEO John Homer after the company increased its year-end cash balance by 96 per cent to £33.35 million as well as a 16.7 per cent increase in revenue M ost water companies in England and Wales have re-submitted their PR19 business plans to Ofwat. Only Severn Trent, South West Water and United Utilities – which achieved fast-track status in the original round of submissions – were not asked to rework their plans, with Thames Water, Southern Water, A… nity Water and Hafren Dyfrdwy marked for signiˆ cant scrutiny and the rest rated slow track. While many of those re-submitting their plans have been able to bring about reductions in customer bills through improved e… ciencies, many said they could not meet the regulator's full demands. Anglian Water restated its belief that its plan is "the right one for its customers, its region, and the environment" and said it stood by its proposal to increase investment by around 30 per cent to £6.5 billion for AMP7, despite Ofwat calling for a reduction of more than £1 billion. "We strongly believe that the investment we have proposed is essential in our water-scarce and rapidly growing part of the country," Anglian CEO Peter Simpson said. "The increase in expenditure is necessary and driven by demands related to signiˆ cant growth, and climate change pressures." However, Anglian said it would be able to reduce its proposed bills by 0.1 per cent due to the Government's planned metaldehyde ban, which has allowed it to remove £65 million of associated investment. • Water companies re-state case for investment in AMP7 Companies resubmit PR19 plans Thames Water said its new plan "commits to deliver more for its customers and the environment at a reduced cost", with its proposed budget for the ˆ ve-year period falling from £11.7 billion to £10.9 billion, although Ofwat had indicated that it should fall to £9.4 billion. The company said it spoke to customers, stakeholders and regulators and added: "The vast majority of this feedback has reinforced our view that further cuts would prevent us from delivering the major investment our customers demand." Southern Water was ordered to make major e… ciency gains and said it has identiˆ ed £366 million of expenditure reductions on its £4 billion plan, closing around half of the cost challenge set, and that it "provided the evidence and analysis we believe Ofwat needs to support the remaining £400 million challenge". The spokesperson added: "The South East faces major challenges in ensuring adequate resilient water resources – as Environment Agency chief executive Sir James Bevan put it, 'the jaws of death' of changing climate and growing population. "We believe our revised plan – independently assured and audited – is up to the task of meeting the challenge of resources, the test of public partnership and beneˆ t and the scrutiny of regulators." Wessex Water proposed its highest ever level of investment, and managing Andy Pymer said: "Ofwat have questioned whether all of this investment is necessary and, in the light of new information, we have made some amendments. Where we are satisˆ ed the investment is still essential, we have provided additional supporting evidence." In the initial submissions, companies forecast a total expenditure of £56.3 billion for AMP7, representing an 11.4 per cent increase on the expected actual expenditure for AMP6. Ofwat said £48.8 billion represented a more appropriate ˆ gure to achieve their targets. "We set out, in our PR19 methodology, that we expect company business plans to show a step change in e… ciency relative to past periods," Ofwat said. "Our expectation is based on emerging evidence on e… ciency gains due to the recent move to the totex and outcomes framework, as well as the greater use of markets and regulatory focus on innovation in our PR19 framework." Ofwat will publish draŸ determinations for companies categorised as slow track or signiˆ cant scrutiny on 18 July. It published draŸ price determinations for Severn Trent, South West Water and United Utilities last month, allowing those companies to beneˆ t from early certainty about their income from customer bills and to press ahead with implementing their planned investments. Those companies will make representations on their draŸ determinations by 24 May. All ˆ nal determinations are to be published on 11 December. O fwat has announced fund- ing for a water Regulators' Alliance for Progressing Infrastructure Development (RAPID). This team has been established to ensure a smooth regulatory path for strategic water transfers and joint infrastructure projects. RAPID will bring together sta¤ from Ofwat, the Environment Agency, and Drinking Water Inspectorate into a new team. It will follow a range of projects for inter-regional water transfers and other joint infrastructure projects necessary to provide resilient water supplies into the future, ensuring that issues arising under the regulatory framework are addressed in a timely and co-ordinated way. The intention is to create a 'responsive regulatory regime' to address barriers to collaboration as set out in a joint letter from Defra, the Environment Agency the Drinking Water Inspectorate and Ofwat in August 2018. The RAPID team will complement the existing water resource planning that companies and regional groups are carrying out. It will also will make sure options are tested and available to meet the needs identiˆ ed in the National Framework for water resource planning, led by the Environment Agency. Ofwat chief executive Rachel Fletcher said: "Ofwat is delighted to collaborate with other water sector regulators in setting up • Ofwat, EA and DWI to support major resilience projects Regulators unite on resilience RAPID. It will be a vital element to support the work underway across the whole sector in making sure future consumers have resilient water supplies at an a¤ ordable price while enhancing the environment." Environment Agency chief executive Sir James Bevan, who made headlines with his recent warning that England may run short of water inside 25 years, said: "We are pleased to be working in partnership with Ofwat and other regulators to help ensure our water supply is sustainable for future generations. "The Environment Agency is leading the development of a national framework for water resources, which will identify water needs nationally and regionally. The new team will make sure that the projects required to meet those needs can be implemented, helping to build resilience into our water supplies." DWI chief inspector Marcus Rink added: "The Drinking Water Inspectorate considers strategic planning and investment, with drinking water quality at the core, a priority for the water industry. DWI are pleased to work with the water RAPID team on shared objectives in the interests of consumers." Funding for the water Regulators' Alliance for Progressing Infrastructure Development team will be raised by Ofwat through an additional licence fee. With HM Treasury approval, this is capped at £2.9 million in FY 2-19/20, with the level of funding for future years to be agreed during the Comprehensive Spending Review. Rachel Fletcher said RAPID will be a "vital element" in supporting resilience projects COMMENT It's goodbye from WET News James Brockett, Editor T his issue of WET News is the last that will be appearing in print, as we are ceasing publication from next month onwards. It's a sad day for us, as we put to bed a print title which has been the voice of water contractors for the last 25 years. As editor, I'm proud of so much WET News has achieved over the years, whether it be breaking news stories about contractors and their clients, documenting the commercial evolution of the water industry, highlighting top technical innovations or proˆ ling key players in the sector through market-leading supplements. It's no secret print magazines – especially those with a focus on news – have been operating in a tough economic marketplace in recent years, and we are sorry to disappoint those loyal readers who have looked forward to the yellow-topped tabloid with the slightly embarrassing title landing on their doormat every month. However, the good news is sister title Water and Wastewater Treatment (WWT), the other water industry-focused media brand produced by WET News' publishers Faversham House, is expanding; as is the shared website of the two titles, wwtonline.co.uk, where you can read the latest water industry news, features, opinion and technical articles on a daily basis. We've thought long and hard before making this decision, and in recent months have spoken to a good selection of readers, commercial partners and industry insiders for their views on how best to serve the water contractor audience. We've noted those water contractors who are « ourishing are increasingly embedded in the teams of their water company clients, working within long- term strategic partnerships and delivery alliances. Water company clients, consultants and contractors alike see themselves as facing similar challenges. That's why we think now is the time to o¤ er a single media brand for the water industry. If you are not already familiar with WWT, we would like to invite you to take a fresh look at what we o¤ er over the coming weeks and months. We'll be incorporating the best of what you know and love about WET News – with contractor-focused analysis and features alongside our water engineering and technical content, online and in print – and will continue to run our successful Leaders supplement. The Water Industry Awards, now in its 13th year, is going from strength to strength, while WWT has a growing stable of conferences across the UK for those working in drinking water, wastewater, networks and asset management. Our round table events provide the perfect forum for networking and discussion, our e-mail newsletters provide a snapshot of key developments, and our learning resources on wwtonline.co.uk include our downloadable 'WWT Explains' reports and case studies. It's a crucial time for the UK water industry, as it faces up to the challenges of climate change, political upheaval and a digital transformation of its operations, at the same time as it grapples with tight ˆ nancial settlements from its regulators. We promise to continue to cover these big issues and more under the WWT banner. So, it's goodbye for now – do join us again soon in the newly enhanced WWT and WWTonline. It's goodbye from

• Cover