WET News

WET NEWS WATER AND EFFLUENT TREATMENT NEWS News+ Alliance newcomers beat the competition, see p6; Taking the 'bust' out of the AMP cycle, p8-9 Onsite: Peacehav- en On time, on budget and under cover. Take a look behind the doors of Southern Water's flagship treatment works, p10, 12 Insight: Flood risk management Mapping could be key to keeping groundwater at bay, p30-31 Foresight: Have your say on improv- ing the AMP cycle, and what can be done to lessen the impact of extreme weather, p40 "We're working with the repre- sentatives making those deci- sions" Richard Coackley, "... we can set a new benchmark in market-leading solutions for Scot- tish Wa- ter" Graham Howells, p6 Two water Œ rms look set to fast-track the price review process. The decision should mean reduced cyclical peaks and troughs for their contractors and supply chains T wo joint ventures, Caledo- nia Water Alliance (CWA) and BBV Alliance, are to be Scottish Water's infrastructure partners for its 2015-2021 invest- ment period. CWA will deliver £360M of investment in the wa- ter infrastructure, while BBV will undertake the £340M spend on the wastewater infrastruc- ture. The Caledonia Water Alliance is a partnership between Morrison W ater regulator Ofwat said only South West Water (SWW) and A‹ n- ity Water have qualiŽ ed for a fast- track passage through Ofwat's 2014 price review for the next regulatory period. Earlier this year Ofwat said it will "pre-qualify" water compa- nies that have outstanding busi- ness plans for the period 2015 to 2020, meaning plans that pass its B alfour Beatty has blamed "challenging economic conditions" in the UK construction industry as well as a signiŽ cant downturn in the Australian natural resources sector for contributing to a 32% fall in pre-tax proŽ t from £277M in 2012 to £187M last year. Andrew McNaughton, chief executive o‹ cer at Balfour Beatty, said: "In 2013 we faced challenging economic condi- tions in several markets and experienced operational issues in the UK construction busi- ness. The remedial actions taken in underperforming areas are delivering results and have positioned us better for the future." The group's Support Service division has reported a reduced order book in the water sector as AMP5 nears completion in 2015. The division recorded an 83% increase in underlying operating proŽ t last year to £55M. As water companies choose their partners for the next cycle, Balfour has already won a three-way joint venture contract worth a potential £1.5B with Thames Water. While the 23-month early contractor involvement is in the order book (£10M), the vast majority of this work is yet to be booked. Alliances picked for Scottish Water's SR15 work Utility Services and AECOM, and the BBV Alliance comprises Black & Veatch and Amey subsidiary Byzak. Between them they will deliver upgrades, maintenance and new infrastructure assets in Scotland. An element of two consortia's programme of work will be self- delivered and the remainder delivered through contract part- ners, and the alliances are now working with Scottish Water to procure Tier One suppliers to help deliver the programme. Geo£ Aitkenhead, Scottish Water's director of asset man- agement, said: "This is the Ž rst stage of ensuring we have the right partners, with the right skills, to help us deliver the next stage of our continuing invest- ment which is delivering real beneŽ ts to our customers while supporting the economy and jobs in Scotland." "This is the Œ rst stage of ensuring we have the right partners" Geo Aitkenhead, Scottish Water Fast-track status for South West and A nity constructive dialogue with all companies, so that they can demonstrate that their plans deliver the best possible out- come for customers," she said. "While the business plans of other companies demonstrated areas of strength, against our very high bar for pre-qualifying for enhanced status only these two companies delivered con- sistently," Ofwat said. SWW and A‹ nity must sub- mit revised business plans by March 17, 2014. Ofwat will publish dra¤ determinations for enhanced companies at the end of April and publish¥Ž nal determinations for all companies in December 2014. An A‹ nity Water spokesper- son said: "We are pleased that Ofwat has pre-qualiŽ ed our 2015- 2020 Business Plan for enhanced status. We will now consider carefully Ofwat's risk and reward guidance." 'Challenging' conditions blamed for pro• t drop tests for outcomes, cost and a£ ordability, and board assur- ance. For contractors to both water companies it should mean reduced peaks and troughs in workload with the companies able to commit to work for the next AMP. Ofwat is now asking SWW and A‹ nity Water to accept its risk and reward, including the cost of capital, which was pub- lished in January. The two water companies, if they accept Ofwat's guidance terms and undertake a number of other limited actions, will be able to fast-track the price review process, says Ofwat.¥ Sonia Brown, Ofwat chief reg- ulation o‹ cer, said the plans submitted by SWW and A‹ nity Water "stand out". "These companies have achieved plans of particularly high quality, with a consistent focus on listening and respond- ing to what their customers want. We look forward to continuing a MARCH 2014 Volume20 • Issue 03 REALITY CHECK The transitional investment period will see substantial spending brought forward from AMP6 into the Œ nal year of AMP5 All but two of the water and sewerage companies in England and Wales have not pre-qualiŒ ed, meaning it will take longer for business plans to be approved More than £20B is set to be spent during AMP6 Sonia Brown

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