UK water companies will need to significantly increase infrastructure investment

Posted: Thursday 11th May 2017

Servelec Technologies, a leading provider of business optimisation solutions has completed pioneering asset management research for the UK Water industry on behalf of UKWIR (UK Water Industry Research).

UKWIR's Long Term Investment in Infrastructure project began in May 2016 with the aim of presenting a body of evidence for the long-term infrastructure needs of the UK water industry. The project, undertaken by asset management specialist George Heywood, his team from Servelec Technologies and colleagues from Frontier Economics and Atkins Global, seeks to raise awareness of the issues with government and industry stakeholders.

The report, which will be published by UKWIR soon, will show that UK water companies need to significantly increase levels of expenditure in infrastructure, both in the medium and long-term if current service standards are to be maintained. Without increased expenditure in infrastructure the 350,000km of water mains and 625,000km of sewers in the UK will begin to fail more often, the research shows.

Increased expenditure requires financing, which will need to be achieved through increases in consumer bills. Using a model of the way water companies are financed in England and Wales, colleagues from Frontier Economics used Servelec Technologies' analysis to estimate the effect the additional investment will have on bills to be an additional 0.7% increase year-on-year to 2050.

Using Servelec Technologies' asset management software PIONEER as an analytical tool, the project team was able to determine an acceptable level of investment based on a variety of short and long-term scenarios which included the effects of social and climatic changes and the potential benefits of future technologies.

Following the completion of the report, Technical Director George Heywood said: "We are pleased with the body of evidence we have provided to the UKWIR Steering Group and we hope that the UK water industry as a whole will benefit from this research.

"The report will advise UK water companies, the Government and industry authorities of the level of investment that is required to achieve the replacement and rehabilitation needed to offset deterioration of UK water networks due to age and use, and the subsequent impact on the consumer.

"The project team's thorough analysis has made use of national asset databases, combined with deterioration, service, cost and optimisation models. It shows that if the industry does not increase expenditure then bursts, interruptions, flooding and pollution will happen more regularly, in opposition to the increasing service expectation of customers. Failing to increase expenditure now will result in significantly higher recovery costs in future years adding to the burden on the consumer and network infrastructure."

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April 2021

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