Utility Week

Utility Week 1st November 2013

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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Operations & Assets This week Thousands of jobs could be saved as Ofwat a llows spending to be moved forward from AMP6 Water firms allowed to bring forward £100m investment Thousands of jobs in the UK water sector could be saved after the industry came to an agreement this week to accelerate more than £100 million of investment. Ofwat has allowed water companies to bring forward vital maintenance and improvement Smooth treatment: spending trough averted works from AMP6 (which starts in 2015) into 2014/15 to help level out expenditure. As part of the arrangement, water companies have committed to covering the cost of borrowing the money to do the work a year early. Richard Coackley, chair of the working group on cyclicality and a former president of the Institution of Civil Engineers told Utility Week he expected companies to put in "a reasonably substantial sum" upfront. The move is intended to reduce the peaks and troughs of investment in the water sector, where spending falls significantly in the last and first years of the five-year regulatory AMP periods while ramping up in the middle years. Research by industry trade body British Water has shown that this cyclical spending has led to job losses of up to 40,000 in the sector. Under the new arrangement, each water company will confirm the amount of transitional investment it is looking to accelerate as part of the 2015-20 business plans, which are due to be submitted to Ofwat in early December. According to British Water, initial feedback indicates that companies will bring forward more than £100 million of work. CM Pan-utility Energy group makes the running on new apprenticeships An employer-led partnership set up to secure the energy and utility sector's workforces has been named a forerunner of a new government apprenticeship reform programme. The Energy and Efficiency Industrial Partnership (EEIP) has been named as one of eight projects selected by the Department for Education (DfE) and Department for Business, Innovation and Skills (Bis) to spearhead the creation of a more effective apprenticeship system in England. The partnership comprises 67 key sector employers, with lead support from: National Grid; Energy & Utility Skills (EU Skills, the employer-led organisation responsible for benchmarking skills and standards in the sector); the National Skills Academy for Power; and Asset Skills. Collectively, the EEIP has been awarded funding as part of the Bis Employer Ownership of Skills pilot. EU Skills chief executive Neil Robertson said: "A skills and recruitment gap is currently opening in the energy and utility sector, which, if left in its current state, will leave it requiring 208,000 employees by 2025. "We need to radically rethink our current apprenticeships system, because it is not providing our industries with a sustainable supply of new recruits. These Water Thames names eight Tideway Tunnel contractors Thames Water has named the eight contractors that will be tendering for the main construction work of the Thames Tideway Tunnel. Subject to consent from the Planning Inspectorate, construction on the project is due to start in 2016 and will involve 24 construction sites across London. The three main works packages are worth up to £2.3 billion. The shortlisted contractors will be bidding for one or more of the three packages, which have been split into geographical sections. The shortlisted ventures are: •  East: Bam Nuttall, Balfour Beatty, Morgan Sindall; Bechtel and Strabag; Bouygues Travaux Publics; Costain, Vinci and Bachy; and Hochtief and Murphy. •  Central: Bam Nuttall, Balfour Beatty and Morgan Sindall; Costain, Vinci and Bachy; Ferrovial Agroman and Laing O'Rourke; and Skanska, Bilfinger and Razel Bec. •  West: Bam Nuttall, Balfour Beatty and Morgan Sindall; C ostain, Vinci and Bachy; D ragados and Samsung; Ferrovial Agroman and Laing O'Rourke. reforms will help to tackle the sector's lack of future-proof skills and ageing workforce, by channelling new talent through to a career in the sector." By the end of 2014, it is expected that the first energy sector apprenticeships will be delivered under the new standards set by the EEIP and its members. The government envisages all new apprentices to be starting their programmes under the new standards by September 2017. Water Firms should 'spend more to innovate against leakage' Trevor Bishop, head of water resources at the Environment Agency, has said that water companies need to invest more in innovation to reduce leakage. Speaking to Utility Week at Water UK's annual leakage conference last week, Bishop said there had not been a market for "innovation required to drive leakage down". According to Bishop, the reduction in leakage had plateaued because many water companies were not prepared to invest in supply chain innovation. "It becomes a self-fulfilling prophecy because if you are not prepared to invest in innovation to drive something down, you never need to do so because your targets will be flat," he said. Bishop said regulator Ofwat's methodology could help companies reduce leakage. "In the past, relatively simple economics have set us a target, but actually many of us have known intuitively across the industry, probably leakage should have gone down a bit. It doesn't look quite right given the pressures of climate change and population growth. "The new methodology is not just about the economics – it is also about talking to your customers," he said. UTILITY WEEK | 1st - 7th November 2013 | 21

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