Water Industry Forum report informs thinking for AMP8 delivery models
With water companies expected to be set ambitious targets for the next five-year regulatory period by Ofwat and other regulators, we have partnered with British Water’s Water Industry Forum (WIF) on a paper exploring the optimal delivery model for Asset Management Period 8 (AMP8).
Today we launch ‘The Optimal Delivery Model for AMP8 - A View from the Supply Chain’. We have partnered with WIF, alongside Galliford Try, JN Bentley, and Atkins, on the paper which is based on a series of workshops that explore potential responses to AMP8 delivery challenges.
Such challenges include supply chain disruption from Brexit and COVID-19, high inflation and skills shortages, and more rigorous biodiversity and sustainability goals changing the nature of the market.
The paper warns that failure to tackle these could lead to further supplier issues, cost increases, and suppliers choosing to move away from the water sector – all resulting in an inability for water companies to meet Ofwat’s required regulatory outcomes.
The paper highlights a need to be collaborative when sharing risk across the supply chain and the water companies, incentive models to incorporate social value and net zero, and closer alignment between tender scope and actual delivery requirements.
Meanwhile, water companies are being called upon to build capital delivery approaches around two distinct delivery models - a programmatic approach and a client-side ownership approach.
Jason Jones, Director, said: “The pressures facing the water sector are larger than ever, with the failure of elements of the supply chain a distinct possibility if action is not taken. Cooperation across the sector has never been more important, and for the first time, this paper brings together the views and experience of the supply chain.”
“It sets out clear and defined ways in which the water sector can improve outcomes, benefit the environment, and manage risk. The sector is being proactive in stepping up to meet the demands of AMP8 and is acting now to best prepare itself for successful delivery.”
Martin Hennessey, Director of Capital Delivery at Dŵr Cymru Welsh Water, who provided feedback on the paper, commented: “I welcome the paper as it both highlights the range of challenges facing the water sector and the wider construction industry, and identifies the areas that require change in our AMP8 delivery models to respond to these market challenges and to make the sector more attractive”.