Irish Water could profitably learn from the hard-won experience of others
Opinion: The key to success is a properly thought out asset management plan
The recent water supply restrictions in the Dublin area reminded me that it has been over two years since I spoke at conferences there, outlining the challenges likely to be faced by Irish Water. Not least of these was the creation of one water authority from 34 councils, who manage the provision of water and sewerage services, a model incidentally that was 40 years old in October last year in Northern Ireland.
My invitation to speak at the conferences was not coincidental, since the clue was in my theme: “10 things you need to know about setting up and running a government-owned water company”. Hardly a snappy title, but it drew in the audiences and covered some significant areas that took many years for Northern Ireland Water and its predecessor agencies to complete.
The problem with being a water utility in Ireland, including even an embryonic one like Irish Water, is that you will always be compared with the more efficient English and now Welsh and Scottish water companies. Economic regulators enjoy making these comparisons, even though the comparator group have been at it over 22 years and importantly, they are mostly in the private sector – they enjoy governance models that provide flexibility in making quick business decisions, and don’t suffer from competing priorities for funding in the public sector.
It is this latter area that is the Achilles’ heel of Irish Water, in meeting raised customer expectations once charging is introduced, and improving compliance with EU standards in drinking water and waste water treatment works and collection systems . Failure to meet EU standards attracts infraction proceedings and potentially eye-watering fines.
For example, a town with about 30,000 population and a failing waste water treatment works could expect to be fined up to €50,000 per day. Not so long ago, Northern Ireland had nine out of 13 locations in the UK subject to infraction. Today, with significant investment over a 10-year period, it has none.
In this brief space I can deal with only one central aspect – an asset management plan – but other key challenges facing Irish Water would include robust business plans to satisfy the new economic regulator, who will forensically analyse operational costs; how best to weld 34 very disparate local authorities ad unum in terms of water and sewerage responsibilities and ensuring fair resource allocation; utilising different governance models across a range of management processes; and of course finance, as difficult to find as 100 per cent compliant water systems, and how to raise the reported yearly €1 billion necessary just to maintain momentum.
However, the key to successful targeted investment is an asset management plan. That gives a structure towards where the capital spend is needed, and importantly prioritises whether the treatment works in Bundoran is modernised before say Bantry, using transparent decision-making tools and not popular choice.
They are complex pieces of work and that’s where detailed knowledge of every asset, on the surface or buried, in water or wastewater infrastructure, meets customer service level expectations, as well as EU or local legislative requirements. A simple model to understand the complexity is to assess the performance of the washing machine in your home. How much service is left in it, do you replace it or keep fixing the parts that break such as the pump, is it using too much energy and water, soon to be metered, and what if the EU intervenes in your choice by imposing new regulations or deadlines on replacement? Multiply those types of decisions on every water and wastewater asset in Ireland, and you begin to get the picture. NI Water is now on its fourth asset management plan, the previous ones being used to target investment of about £2 billion over a 10-year period, which included private sector funding being levered in, to support scarce public sector funds, primarily to achieve compliance with EU directives. There is also the added benefit of a plan giving visibility to the procurement supply chain of contractors, consultants and numerous local suppliers. That builds confidence in the supply chain regarding investment in equipment, training and staffing to ensure efficient capital delivery.
Every move, short-term and long-term, is part of the overall plan, fully costed and scheduled. Such visibility to the Irish market of investment plans by Irish Water, whether a mix of private and public funding, is essential to inform key players and gain their long-term engagement.
Asset management plans also draw together longer-term strategies such as water resource planning to meet supply/demand, and that would include targets in leakage and water efficiency measures. This would be particularly relevant to the eastern seaboard, given the stark reminder of recent water restrictions and its long-range water prospects. Irish Water has a difficult mountain to climb and to succeed it will need the buy-in of existing staff, particularly those on the frontline, since major incidents and crisis management have a cruel way of exposing weaknesses in morale, leadership and commitment.
Shrouded in clouds
It also needs some experienced guides to reach the summit, but all too often the blue sky and peak become shrouded in clouds and mist, making the goal difficult to see. One thing it can be sure of, however, is that there are plenty of spectators watching from a safe distance.
The hard-won experience and expertise of NI Water is next door, with other successful models in England, Scotland and Wales.
The enormity of the challenges facing Irish Water could be substantially mitigated, I believe, by gleaning first-hand lessons, sometimes expensively learned, from sister water agencies and by not having to invent systems, processes and management operations that have proven to be effective, efficient and most economic over the past 20 years.
Other key sectors, responsible for related enterprises, North and South, have pointed the way: the aim of the well-advanced All-Island Project is to create a single market for gas and electricity on the island of Ireland, and Waterways Ireland is already a North-South body caring for and promoting the use of our wonderful inland waterways.
It may still be the case that “only our rivers run free”, but Irish Water will need all the help it can get, in managing the enormous water resources you will all have to pay for.
Trevor Haslett is a former chief executive of Northern Ireland Water and an associate director of ASG Ireland. He was awarded a CBE in the New Year’s Honours list