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Canals hit the jackpot Britain's waterways are in a heady period of new investment, reports Jackie Whitelaw

Inland waterways; Overview

For the first time in decades, if ever, the engineers at British Waterways feel they are starting to win the battle to make Britain's 3,200km canal network a resource that is safe and available for use 365 days a year.

Threats to close unstable bridges and drain leaking waterways are receding as contractors start to take real bites out of the safety-related backlog. BW now has the option to take a share in canal side developments and use the revenues to invest in the waterway network. And the potential for other innovative public private partnership arrangements are there to be had.

Extraordinarily to some, no doubt, this revival in BWs fortunes is all due to a Government publication.

Unlocking the potential - a new future for British Waterways was produced a year ago by the Department of Environment Transport and the Regions. It released British Waterways from the budgetary restrictions of being perceived by the Treasury as a nationalised industry.

At the same time the document awarded BW the extra £8M a year it had been begging for to save parts of the canals from dereliction, and for good measure set a timetable for wiping out the interest on BW's debts.

'For the first time we had a Government and senior ministers who saw the canals as something of value rather than a liability,' says British Waterways operational director Stewart Sim. 'By giving us the additional funding for the backlog and allowing us to take part in PPPs they wanted to make sure we could benefit from all the potential of the waterways.

'The key initiative for us was to be able to tackle the safety-related backlog of £90M of work in seven years rather than 15,' says Sim. 'But it was also the recognition by Deputy Prime Minister John Prescott that there is not just safety-related work to do but £160M of statutory arrears that need addressing. Government accepted we had a problem and gave us the freedom to tackle the issues ourselves.'

And that is exactly what British Waterways is doing.

Backlog work has been accelerated. This year - 1999/2000 - it should be down to £70M and the entire backlog should be eliminated by 2005/6 at the latest.

But if new revenues come through from some of the new initiatives now possible since the publication of Unlocking the potential, that work too could be completed even faster.

Once the backlog is cleared BW can switch its spending priority to tackling statutory maintenance arrears. The target at the moment is to catch up on those within the next 25 years. British Waterways chief executive David Fletcher is in talks with the Government to find more money so all work will be completed by the end of the decade.

The most appealing idea is to use the canal network as a water grid to transfer water from areas with plenty to those in need. Over the years BW has proved that it can transfer water from Birmingham to Oxford and into the Grand Union canal.

'But we are now working with a Treasury taskforce and PriceWaterhouseCoopers on establishing the business case for a public private partnership to carry out water transfer on a wider scale for external customers,' says Sim. 'Potential partners could include the big water plcs or major contractors.

'The PPP team is focusing on the possibility of increasing BW's sales by 50%, most likely using water from the north west and selling it in the south east, but it could be anywhere.' Capital works could involve installation of back pumps at locks, the raising of canal banks to cope with flow and diversions to take extra water around certain lock flights.

There are already plans to take water from the Black Country and sell it to Thames Water's Grimsbury Reservoir so the plc does not have to abstract from the depleted River Cherwell. 'The capital expenditure costs would be mainly on backpumping to bypass locks,' says Sim.

'That's how a water grid would work, only on a much larger scale. We are right at the start of a sensitive three or four month evaluation period but if we get this right it will be good for the canals and for everyone.'

Other PPPs with developers also open up opportunities for British Waterways. 'We've been able to keep the proceeds of disposals of land to reinvest since Nick Ridley was Environment Secretary in the late 1980s,' Sim says.

'But we lost potential revenues from high quality developments benefiting from canal side locations due to our limited land holdings. A property PPP will allow us to have a greater involvement in joint ventures leading to regeneration and share the proceeds for future maintenance and development of the waterways.'

The new approach to canals by Government is allowing BW to be much more proactive in canalside development and take the lead in pan-local authority schemes like London's Waterway Partnership. This is a proposal to regenerate derelict land alongside the Grand Union and Regent's Canal with British Waterways acting as the unifying organisation for the 15 London boroughs along the route.

'There are more canals being restored or rebuilt now than at the height of their original construction,' says Sim. 'It is a very exciting time.'

Why read this

New canal age

Safety backlog fast tracked

Public private partnership plans

Water transfer grid progress

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