Yännick van den Nieuwendijk, Managing Director for the Nordics, UK & Ireland, Amiblu, shares his personal opinion on the regulator’s demise.
The recent news that water regulator Ofwat will be scrapped and replaced to overhaul the UK’s “broken” system didn’t come as much of a surprise to those of us who are part of the industry.
I have seen first-hand how Ofwat’s shortcomings have perpetuated failings within the UK water industry, holding it back from modernising.
For example, Ofwat’s reluctance to encourage or help water companies use more advanced materials/processes or grow their pool of suppliers has led to a less diverse and competitive UK water industry, reluctant to embrace innovation.
In my view, Ofwat’s lack of effectiveness is among the root causes of many of today’s problems, and news that UK water companies will now be overseen by a new watchdog to ‘prevent abuses of the past’ is a positive step forward.
As we look forward, I think it is important to highlight some urgent areas where the new watchdog needs to focus attention.
Firstly, it needs to play a much more active role in advising water companies about which technologies can improve value for money and sustainability. For example, by encouraging the use of smart water pipes & fittings, which are common in many other countries and more versatile, sustainable, longer lasting, recyclable and better performing than standard pipes and fittings.
Likewise, the new regulator needs to develop methodologies and documents that help guide companies’ decision-making processes when assessing which materials to use. This will encourage the uptake of more innovative water infrastructure.
From a structural perspective, the UK water industry needs more competition, especially at a local level, and it would be welcome to see a shift in mindset.
One relatively simple way to help achieve this would be if the new regulator reviewed and standardised the technical standards and methodologies used by different water companies.
Sometimes these can differ greatly and, in some cases, have not been updated for decades. Consistent technical standards will help create a more level playing field and allow for new technologies and suppliers to be considered.
Similarly, the regulator also needs to level the playing field for suppliers. It has happened before in sectors like energy and telecoms, and it should happen again here.
Another area which needs to be addressed is the large gap between the materials required for the UK’s transformation, and what the supply chain will be able to realistically deliver.
In my view, if the UK water sector continues to only use the same materials as it currently does, there will be a significant gap between supply and demand.
And unless the sector embraces alternative materials, the transformation will be slower, more expensive and less effective. It might even be unachievable, and there are two reasons why.
Firstly, the existing supply chain will simply not be able to deliver the required quantitiy of materials (if only older ones are used), and secondly, only innovative and newer materials, like glass-fibre reinforced plastics can deliver the required results.
The new regulator has a role to play in encouraging, or even demanding, that suppliers use alternative and newer materials.
This will also help the new regulator monitor and police the performance of water companies in relation to consumer and environmental standards, which should hopefully lead to fewer stories in the media about sewage spillages and so on.
And while there are some who might argue that introducing new materials and technology into the network is expensive and that the investments could be better directed elsewhere, I’d disagree.
The fact is that this approach is the only way to make sure that bills drop, taxpayers and investors get value, and the public gets a better quality, greener water network that is more resilient in the long run.
Moreover, using newer materials means that once improvement projects do kick off, replacing ageing UK infrastructure can be completed faster. Given the urgency of the situation, the faster improvements can be made, the better for everyone.
It’s not going to be easy to deliver the required large-scale transformation – made more difficult by the UK’s increasingly unpredictable weather patterns. Now is the time for the new regulator to galvanise the industry and start to do things differently.
