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contractors and how they will respond to circumstances as they arise.
One WaSC for instance appears to have taken back in house some, if not all, of its ‘reactive’ work. This means that where for instance a drainage problem is reported that needs immediate action the in-house team will make the initial response as opposed to passing it first to the Tier 1 contractor which would then pass it down the line until it reached the ‘local’ contractor approved to make such a response. By bring this service in-house first and foremost should improve response times and potentially control the cost of this part of the operation better by reducing the number of intermediate levels that a problem report has to go through before a response on the ground is achieved. Not only could this mean savings for the WaSC but also significantly improved customer satisfaction as they in turn will have their problem investigated at an earlier time than might have happened previously.
There may be other changes that are being undertaken as part of the overall review of how the systems works and is funded but again public information on this seems to very limited, if available at all. This may well be simply that the WaSCs do not feel it is information that would be of public interest or that as it is largely internal operations changes that it is simply not the business of the public how they achieve the outcomes required. But again this might impact on how the contractors and suppliers prepare their ground ahead of any requirement to complete work, particularly those that lay outside of the general ‘approved’ lists that may be called upon for specialist skills at short notice.
QUESTIONS THAT MAY YET HAVE TO BE ANSWERED
So what do we know or think we know? Actually apparently very little! So what questions need to be answered so that those at the ‘sharp end’ of the industry can make some sort of plans?
The first question has to be ‘is the committed financial figure given as investment by each of the WaSCs a fixed spend that is set in stone’? If it is what areas of operation will this fixed spend be truly aimed at. When being spent and in order to get best value for money will higher cost, more complex projects be targeted early in the AMP to ensure that changes in inflation or interest rates etc. will not overly affect the value of the fixed spend or the potential workload that it can achieve? Or will these projects be undertaken early to ensure that the spend commitment is met within the five year period?
If this is the case does this mean that in order to meet any early high demand or complexity of works that, in the latter part of the AMP, contractors and materials or equipment manufacturers will have geared up to point that they may then be left sitting with little significant work and therefore income with larger than necessary workforces or raw materials supplies because the WaSCs have run out of money?
Should this scenario arise, is there any contingency for continued spend (overspend on the fixed published sums) as and when these fixed spend moneys become short or will the work simply dry up long before the end of the AMP period? If this were to be the case there is the argument that companies that have geared up to meet early demand with be left out in the cold and be forced to lay off workforces and potentially shut down so limiting the potential contractor, equipment and materials supply for the following AMP. This in turn may affect the potential for a speedy upturn as AMP 7 begins as new workforces need to be trained, again, and lead times for orders of machinery and materials stack up.
As previously mentioned, due to the lack of clear information much of this may be dismissed as pure speculation. But we have seen in the past that WaSCs seem not to take account of the requirements of the industries that service their construction requirements when making their plans and often simply expect that the services will be there on demand as and when required and sometimes there appears to be something of a shock to the system when the capacity to complete works is not readily available.
Is there a real need to smooth out the water industry spend framework to ensure that such a situation can never occur? Such a smoothing would ensure that the construction side of the industry has a future it can plan for without relying on the whims of the Water Companies whose only real aim still is the profit margin, often irrespective of what it means to the industries that serve then or the people that work in those sectors. It would also mean minimal lost skills as trained workforces would not dissipate and workloads would not drop away as they often have in the past.
Whilst the idea of a pricing review that limits the customer cost of water services is good for consumers, to simply express a headline AMP Spend that may look good in the press when it comes to polishing up the images of what still remain profit driven, monopoly water companies within their areas of responsibility, sometimes looks as though there is little concern or respect for others areas of the industry. The 1,000s if not tens of thousands of owners, managers and workers that provide the network installation replacement and renovation skills equipment and materials that the water companies rely on to provide a continuing service, even today, can really feel the pressure and often damaging uncertainty of not knowing what if any work is coming their way, when it will happen and if it will continue in a form that means they have an income in just five years-time when it all starts all over again. An holistic view of all industry sectors would potentially ensure a more profitable future for all from the water companies to the smallest of suppliers.
Thank you to anyone who may have contributed to this article. If you have any comments, or would like to respond or follow up on this article then please get in touch.
If you have any suggestions for future topics, or ideas of how we can approach our feature subjects from different angles, then please do let us know.
8 drain TRADER | September 2015 |
www.draintraderltd.com
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