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An unprecedented task for water
Coronation Street? AMP8 may indeed turn out to be something of a drama, but companies and the supply chain will be hoping it’s not a horror show.
There are lots of issues to deal with. Paul Horton, chief executive of the Future Water Association, says all water companies are coping with significant increases in investment compared to previous AMPs, ongoing regulatory pressures, demanding targets to reduce leakage, storm overflow reductions, and a tripling of pipe replacement requirements.
And there are infrastructure mega-projects on the way with new reservoir builds, plus ambitious housebuilding targets from the government, where “there’s a huge infrastructure challenge there in terms of resources for connecting pipe networks”.
Horton adds: “It’s tough. The water companies need more people, the supply chain needs more people for delivery, and everyone needs some form of certainty. And this is before we get on to climate change, whether in terms of extensive rain and flooding or no rain and drought, and all the pressures related to that.
“In terms of the challenge, I’ve not seen anything like it in my career.”
Water pipe networks have grown over time, and many are more than 50 years old. “There’s a spider’s web.” This ageing, somewhat opaque and multi-material network must be managed alongside sewage treatment plants, pumping stations, CSOs, and so on. The investment to do that also has to meet good governance and procurement standards.
Horton adds that the demands to reduce leakage as and when it is found can mean that larger works that might solve the problem and prevent future leaks, such as replacing the pipe altogether, are neglected. That’s at a time when the replacement rate for old pipe network in the UK lags peers in Europe (the rate is about 0.5%). “There are things like that where a drive for reduction in leakage doesn’t necessarily allow for the best behaviours in managing the network.”
And replacing pipe is literally a big job. “The projects the water utilities are undertaking are big, and when I say big, I mean they are large diameter projects,” explains Coxhead.
“If you are looking at services, connecting houses or connecting industrial buildings to a mains, it means 25mm – 90mm pipe, and there’s loads of that equipment that’s available. That equipment is relatively easy to transport. You can stick it in the back of a Transit van, and two people can pick it up.”
By contrast, many of the projects water utilities are considering require 600mm – 1,000mm pipe that requires the use of large equipment that must be carried on the back of a vehicle or a dedicated trailer. “It’s technical and expensive. Because of the complexity and technical nature of the equipment, customers often prefer to hire it. We maintain and service equipment and make sure it’s calibrated, because the customer must be able to demonstrate the integrity of the weld.”
Parker adds: “Having the asset is one thing, making sure you’ve got the team to be able to support and service that asset is another. The assets go out on hire for a long period of time. You need to have the right team in place to be able to support from a service and maintenance perspective.”
“It’s tough. The water companies need more people, the supply chain needs more people for delivery, and everyone needs some form of certainty. In terms of the challenge, I’ve not seen anything like it in my career”
Paul Horton, chief executive, Future Water Association
Getting to grips with a new landscape for trade
With a protracted global trade war seemingly inevitable, Paul Horton says there will also always be challenges to contend with in terms of interruptions to supply of equipment and materials. The important element, he argues, is long-term certainty in the supply chain [see box], which enables suppliers to take risks.
“Where does that supply challenge hit? Is it pipe materials, is it fittings, is it pipes themselves, is it the couplings? Is it everything linking into the pipes such as the valves? And it may be all of the above.”
Lead times for materials from overseas need to be considered, especially in a volatile trading environment. “A single project, such as replacing X amount of pipe, can easily become a much longer project than it should be. That links back into availability of materials. You can make sure they are warehoused and maintained. But you have to hold stock, and that is money, which adds risk into the mix.”
Wolseley has backed the water industry by taking the decision to invest in the giant Chesterfield facility. The company also has branches all over the country for timely supply of material such as pipe. “Our ambition is to make it as easy as possible for customers,” says Parker. The fact that the company also comprises Fusion Utilities, a multi-utility supply chain partner for water, gas, power, fibre, hire, and repair products and solutions, and Burdens, which specialises in underground drainage and heavy construction products, means the company provides a single port of call for water companies deploying infrastructure in AMP8, whether for potable or dirty water. All Drinking Water Inspectorate certifications are met for efficient sign-off of pipe projects.
Customers also benefit from technical support in terms of translation of network designs into bills of materials and a focus on lean, ensuring there is not oversupply on a job. “We are focused on not only having everything that the customer needs but providing it in the most economical and cost-effective way as well,” Parker explains.
This requires in-house technical resources. But skills, as for everyone in power, water and construction, are a challenge. “That might be the biggest challenge of the lot,” says Coxhead, “for both water companies and tier one suppliers.” Many workers with lots of experience are approaching retirement, he says. “It’s a timebomb. There is a gap when it comes to attracting youngsters into the industry to whom they can pass on their experience and knowledge.”
If the economy starts to grow in the way the government is fervently hoping for, then the labour market is likely to be even more constrained than it is now. The government’s housebuilding plans are also likely to suck up skills that are already much in demand. Coxhead says: “We deal with multiple utility contractors, and they all have very healthy order books. They are waiting for start-up dates from housing developers.
“So, who is going to lay that pipe? Who’s going to connect that power, and who is going to put that fibre in? – ultimately, it's often the same companies.
“It would be good for the country and good for business to have all these people busy and these companies performing, but it’s going to be difficult from a resources, materials and logistics point of view. Everything in the supply chain is going to be constrained if things kick off in the way we expect them to.”
Water company frameworks will play a role in delivering large amounts of stock to single locations, which Wolseley supports from a logistics perspective. But as well as working within supplier framework agreements with manufacturers, Wolseley provides an alternative “fourth emergency service” when it comes to distribution of materials. “The manufacturer may not be keen on sending one stick of pipe into the middle of London. Because we break bulk, we can do that,” Coxhead explains. At a time when speed is of the essence, “they [framework agreements] can slow companies down and limit flexibility and choice”, he concludes.
An unprecedented task for water
Coronation Street? AMP8 may indeed turn out to be something of a drama, but companies and the supply chain will be hoping it’s not a horror show.
There are lots of issues to deal with. Paul Horton, chief executive of the Future Water Association, says all water companies are coping with significant increases in investment compared to previous AMPs, ongoing regulatory pressures, demanding targets to reduce leakage, storm overflow reductions, and a tripling of pipe replacement requirements.
And there are infrastructure mega-projects on the way with new reservoir builds, plus ambitious housebuilding targets from the government, where “there’s a huge infrastructure challenge there in terms of resources for connecting pipe networks”.
Horton adds: “It’s tough. The water companies need more people, the supply chain needs more people for delivery, and everyone needs some form of certainty. And this is before we get on to climate change, whether in terms of extensive rain and flooding or no rain and drought, and all the pressures related to that.
“In terms of the challenge, I’ve not seen anything like it in my career.”
Water pipe networks have grown over time, and many are more than 50 years old. “There’s a spider’s web.” This ageing, somewhat opaque and multi-material network must be managed alongside sewage treatment plants, pumping stations, CSOs, and so on. The investment to do that also has to meet good governance and procurement standards.
Horton adds that the demands to reduce leakage as and when it is found can mean that larger works that might solve the problem and prevent future leaks, such as replacing the pipe altogether, are neglected. That’s at a time when the replacement rate for old pipe network in the UK lags peers in Europe (the rate is about 0.5%). “There are things like that where a drive for reduction in leakage doesn’t necessarily allow for the best behaviours in managing the network.”
And replacing pipe is literally a big job. “The projects the water utilities are undertaking are big, and when I say big, I mean they are large diameter projects,” explains Coxhead.
“If you are looking at services, connecting houses or connecting industrial buildings to a mains, it means 25mm – 90mm pipe, and there’s loads of that equipment that’s available. That equipment is relatively easy to transport. You can stick it in the back of a Transit van, and two people can pick it up.”
By contrast, many of the projects water utilities are considering require 600mm – 1,000mm pipe that requires the use of large equipment that must be carried on the back of a vehicle or a dedicated trailer. “It’s technical and expensive. Because of the complexity and technical nature of the equipment, customers often prefer to hire it. We maintain and service equipment and make sure it’s calibrated, because the customer must be able to demonstrate the integrity of the weld.”
Parker adds: “Having the asset is one thing, making sure you’ve got the team to be able to support and service that asset is another. The assets go out on hire for a long period of time. You need to have the right team in place to be able to support from a service and maintenance perspective.”
“It’s tough. The water companies need more people, the supply chain needs more people for delivery, and everyone needs some form of certainty. In terms of the challenge, I’ve not seen anything like it in my career”
Paul Horton, chief executive, Future Water Association
Getting to grips with a new landscape for trade
With a protracted global trade war seemingly inevitable, Paul Horton says there will also always be challenges to contend with in terms of interruptions to supply of equipment and materials. The important element, he argues, is long-term certainty in the supply chain [see box], which enables suppliers to take risks.
“Where does that supply challenge hit? Is it pipe materials, is it fittings, is it pipes themselves, is it the couplings? Is it everything linking into the pipes such as the valves? And it may be all of the above.”
Lead times for materials from overseas need to be considered, especially in a volatile trading environment. “A single project, such as replacing X amount of pipe, can easily become a much longer project than it should be. That links back into availability of materials. You can make sure they are warehoused and maintained. But you have to hold stock, and that is money, which adds risk into the mix.”
Wolseley has backed the water industry by taking the decision to invest in the giant Chesterfield facility. The company also has branches all over the country for timely supply of material such as pipe. “Our ambition is to make it as easy as possible for customers,” says Parker. The fact that the company also comprises Fusion Utilities, a multi-utility supply chain partner for water, gas, power, fibre, hire, and repair products and solutions, and Burdens, which specialises in underground drainage and heavy construction products, means the company provides a single port of call for water companies deploying infrastructure in AMP8, whether for potable or dirty water. All Drinking Water Inspectorate certifications are met for efficient sign-off of pipe projects.
Customers also benefit from technical support in terms of translation of network designs into bills of materials and a focus on lean, ensuring there is not oversupply on a job. “We are focused on not only having everything that the customer needs but providing it in the most economical and cost-effective way as well,” Parker explains.
This requires in-house technical resources. But skills, as for everyone in power, water and construction, are a challenge. “That might be the biggest challenge of the lot,” says Coxhead, “for both water companies and tier one suppliers.” Many workers with lots of experience are approaching retirement, he says. “It’s a timebomb. There is a gap when it comes to attracting youngsters into the industry to whom they can pass on their experience and knowledge.”
If the economy starts to grow in the way the government is fervently hoping for, then the labour market is likely to be even more constrained than it is now. The government’s housebuilding plans are also likely to suck up skills that are already much in demand. Coxhead says: “We deal with multiple utility contractors, and they all have very healthy order books. They are waiting for start-up dates from housing developers.
“So, who is going to lay that pipe? Who’s going to connect that power, and who is going to put that fibre in? – ultimately, it's often the same companies.
“It would be good for the country and good for business to have all these people busy and these companies performing, but it’s going to be difficult from a resources, materials and logistics point of view. Everything in the supply chain is going to be constrained if things kick off in the way we expect them to.”
Water company frameworks will play a role in delivering large amounts of stock to single locations, which Wolseley supports from a logistics perspective. But as well as working within supplier framework agreements with manufacturers, Wolseley provides an alternative “fourth emergency service” when it comes to distribution of materials. “The manufacturer may not be keen on sending one stick of pipe into the middle of London. Because we break bulk, we can do that,” Coxhead explains. At a time when speed is of the essence, “they [framework agreements] can slow companies down and limit flexibility and choice”, he concludes.
Supply chains: Looking at the long-term picture
Longer-term regulatory planning would help suppliers gear up to meet demand beyond the AMP cycle, says the Future Water Association.
How could the regulatory landscape be improved? The Future Water Association has a few ideas. Greater involvement with the supply chain in terms of how business plans are developed would be a good start, says Paul Horton.
A longer-term view on maintenance of core infrastructure would also be welcome, beyond the five-year AMP cycle. The supply chain needs certainty. “Asset health shouldn’t be viewed on a five-year cycle; it’s got to be over 20 years.
“Taking out the uncertainty and putting more long-term regulation in is paramount.”
When it comes to the spider’s web of pipe networks, in an ideal world, the regulator would ensure companies have targets and resources to find out where everything is and carry out an asset health assessment, says Horton. “We also don’t understand why the regulator cannot go for 100% smart metering, which they can mandate in a water-stressed area.
“Let’s make smart meters nationwide. Unless we are measuring everything, it becomes very difficult to look ahead and use the data: to highlight where leakage is, for example.” Water companies could assist the supply chain by committing to buying a certain proportion of meters (say in the order of hundreds of thousands) even if they are unsure when the total number will be required.
“With that level of certainty, the supply chain can go and source materials to ensure the meters can be supplied, and you can translate that across a whole range of products. We need to ask how water companies can use procurement quickly to create the certainty that suppliers need.”
The water companies also need to give suppliers advance warning of what they require. “Eight million smart meters are going to be required in the current AMP. If all the water companies knock on the meter supplier’s door and say, ‘we need it now’, it’s not going to happen.
“So there is another challenge there.”
About Wolseley
Wolseley Infrastructure is part of Wolseley, the UK’s leading specialist merchant. Supplying the UK’s essential infrastructure sectors, including water, gas, power, and rail. Through its market-leading brands — Burdens and Fusion Utilities — Wolseley Infrastructure provides a comprehensive range of civils, utilities, and drainage solutions. With deep sector expertise, technical know-how, and national coverage, Wolseley Infrastructure supports critical projects that keep the UK connected, resilient, and future-ready.
