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News Release from: IMS Consulting | Subject: Water and Wastewater Treatment Industry
Edited by the Processingtalk Editorial
Team on 06 July 2005
UK Water companies under pressure
The UK water companies are under pressure challenging potential hosepipe bans and compulsory metering, despite making record investments in infrastructure
The UK water and sewerage companies stand accused of failure to invest in the light of drought and potential hosepipe bans and compulsory metering, despite the fact that they are about to spend more money on improving their infrastructure and services than at any time since privatisation in 1989 According to a new research report, "Selling into the UK Water and Wastewater Treatment Industry" published by IMS Consulting, the water and wastewater sector is set to make record investments of GBP17 billion over the next five years
This article was originally published on Processingtalk on 9 Jun 2005 at 8.00am (UK)
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The research has examined the business plans (known as Asset Management Plans (AMP) submitted to the water regulator Ofwat by each of the 28 water and sewerage companies on a company-by-company basis.
In Scotland, for example, the upcoming Capital Investment Programme (Quality Standards III) from 2006-10 will be worth an estimated GBP3.2 billion, while Water Service Northern Ireland is looking to spend some GBP1 billion in its Capital Works Programme from 2005-10.
As the report highlights, some of the major projects and contracts have already begun, with nearly GBP8.4 billion dedicated to ensure pipes, sewers and treatment works are maintained over the next five years including over 22,000 km of water mains to be laid, renewed or relined and some GBP5.5 billion of quality and environmental schemes scheduled to be completed.
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There is however a major inconsistency in the water industry's current planning processes, which the latest round, known as AMP 4, has only served to emphasise.
While the recent review highlighted the increasingly long-term nature of the water companies strategic planning process - including 25 year water resource efficiency plans and framework agreements with suppliers being put in place for 10 years and upward, this is significantly constrained by the relatively short-term 5 year financial planning cycle established by Ofwat.
So while companies now have to take long-term strategic investment decisions based on forecasts which must incorporate greater variables than ever - including the unpredictable impacts of climate change and as yet undetermined requirements of the Water Framework Directive, short-term financial limitations now appear to be having a serious impact on their ability to put long-term measures in place to cope with these worst-case scenarios.
The report author, Elaine Coles, Head of Market Research for IMS Consulting, says, "AMP 4 has been a key milestone in the water industry in defining the huge investment requirements for the industry over the next 5 years.
Our research clearly highlights what each individual company is planning to over the next five year period, when it is scheduled to happen and how much it is budgeted to cost.
The water companies are spending serious amounts of money in order to improve their services but unless Ofwat changes its approach as to how they fund these activities and future-proof against the unpredictable effects of climate change, the situation is likely to get worse.".
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