Pillar Talk
Scottish Water Solutions What Does
Bring to the Table? I’m sometimes asked “what’s different about Solutions?”
I suppose it revolves around the genesis of the Solutions model in the first place, and how the model has evolved over time under the guidance of Scottish Water.
Fundamentally, Solutions provides Scottish Water with a commercially-robust delivery organisation that is tasked with achieving key project outputs in a back to back manner with the regulatory agreement. I think it is this rigorous commercial focus, which has been shaped by Scottish Water since the creation of the first version of Solutions, that provides the key differences in capital delivery.
How has this latest version of Solutions done? With Scottish Water (our client), we’ve faced a significantly different inflation condition to that experienced over the previous 3 years… one that has eroded the available funding for everyone to achieve the regulatory contract. This period of deflation has by necessity brought an enhanced attention to project scope, cost of delivery and management of overall asset risk.
This is best illustrated by the investment we made in the Tiger Team process commencing in January 2011. That process, where we worked collaboratively with the key representatives from AIM and CSD, has contributed to over £65m in value being achieved across the allocated programme (adjusting for project removals and capital maintenance reductions) compared to the forecast costs when we started in April 2010. I’m convinced that the key factor in this achievement has been the willingness of Scottish Water to proactively engage in a collaborative fashion and tackle the challenges together.
In recognition of this engagement, we have committed to reinvesting any gain that may result from the SR10 regulatory period back into the projects under the guidance of Scottish Water.
Another key aspect of Solutions is the ability to provide in-house capital delivery with resources from Laing O’Rourke, Jacobs and Veolia. These firms provide capability to deliver a wide range of capital projects. We have focused this resource on the highest risk projects, so that we can better manage the risk profiles and provide an affordable solution.
I think the Solutions model will continue to evolve, particularly as we look forward to the next regulatory period SR15. We can be certain that “Solutions Mark 3” will look different than “Solutions Mark 2,” if for no other reason than evolution is a continuous process. I’m excited to see what the future will bring!
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