£100m of water work to flow quicker through pipeline

Grant Prior 11 years ago
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Water maintenance and improvement work worth more than £100m is being brought forward to 2014/15.

Regulator Ofwat has allowed English and Welsh water companies to accelerate vital works that would otherwise have taken place in the five years from 2015 onwards.

The move is intended to reduce the peaks and troughs of investment in the water sector.

Historically investment has declined significantly in the last and first years of the five year regulatory period, while ramping up in the middle years.

Research by industry trade body British Water indicates that this cyclical spending leads to job losses of up to 40,000 in the sector and creates uncertainty and inefficiency for contractors.

Each water company will now confirm the amount of transitional investment they are looking to accelerate as part of the 2015-20 business plans, which are due to be submitted to Ofwat in early December.

Initial feedback indicates that companies are looking to take advantage of the initiative, with over £100 million of work expected to be brought forward.

This move is one outcome from a joint industry group that was established earlier this year to tackle issues associated with cyclicality.

The water companies, supplier representatives, Ofwat, Infrastructure UK and other sector regulators have worked together to look at how the profile of investment can be smoothed while providing suppliers with better visibility of future opportunities.

Cyclicality working group chair and former ICE president Richard Coackley said: “Ofwat’s decision to allow this transitional investment will help to reduce the peaks and troughs of workload that do so much damage to companies working in the water sector.

“We believe that the water companies will bring forward significant volumes of work, not only ensuring more efficient delivery through the reduction in the rollercoaster cycle of investment, but also contributing to growth in the economy by bringing forward much needed spending.

“This can all be achieved with no additional cost to customers, who will benefit if the efficiencies achieved drive down costs”.

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