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Sewers: from private to public

This week, water and sewage companies take ownership of private sewers and lateral drains. What effect will this much-anticipated change have on the supply chain? Jo Stimpson finds out.

This Saturday is a day etched in the minds of those in the water industry. It is 1 October, the day that - after more than eight years of discussion - ownership of private sewers and lateral drains that connect to public sewers in England and Wales will transfer to water and sewerage companies.

It is widely considered the biggest change in responsibility for sewerage services since 1 October 1937, when private ownership of sewers came into effect. For the 10 water companies affected, this means a huge increase in assets, as government research suggests there are about 200,000km of private sewers in England and Wales - although the exact figure is not known and water companies’ own estimates suggest the total could be larger.

Inherited infrastructure

Northumbrian Water has estimated that it will take on 13,500km of new infrastructure, Yorkshire Water has estimated 22,000km, United Utilities 32,200km, and Anglian Water and Severn Trent expect to adopt 37,000km of private sewers each. Thames Water has said it will gain around 40,000km on its network and Dŵr Cymru Welsh Water envisages that the total length of its wastewater network will double. South West Water, Southern Water and Wessex Water will also take on a significant amount of existing infrastructure.

“I can’t believe there’ll be a situation where we’ll suddenly see a glut of water companies digging up driveways”

Jason Shingleton, Polypipe

Of course, with additional assets comes additional maintenance and repair work. Water companies have feared that many private sewers could be in a bad state, and that customers will be increasingly keen to have repairs carried out once they are no longer directly footing the repair bill.

From the supply chain’s perspective, this could mean a healthy bundle of new work.

“Water companies […] will be taking on responsibility for many thousands of kilometres of pipes, some of which may be in poor condition,” says Water UK chief executive Pamela Taylor. “There could well be a backlog of maintenance, repair and renewal to tackle.” However, a sudden rush of maintenance work is unlikely to materialise overnight come Saturday. A period of surveying and assessment will come first, as water companies work to establish exactly where their new assets are, what state they are in and what maintenance work is the most pressing.

Digging up driveways

“I can’t believe there’ll be a situation where we’ll suddenly see a glut of water companies digging up driveways,” says Polypipe technical and marketing director Jason Shingleton. Private sewers are likely to vary widely in terms of their material, age and upkeep, meaning water companies could be facing a lottery. Welsh Water, for one, says it expects to find that much of its sewer network “is in disrepair and will take some time to sort out”. “The actual expenditure associated with the ownership and maintenance of private sewers will only be revealed over time as companies respond to call-outs and improve their understanding of the transferred assets on an ongoing basis,” says law firm Hogan Lovells counsel Suzanne Rab.

Water companies also have a further hurdle to traverse before they can begin private sewer repairs in earnest - negotiating price rises with water regulator Ofwat, which has already confirmed that costs associated with the adoption of private sewers are legitimate costs to be recovered through customer charges. Ofwat has already set price determinations for the 2010-2015 AMP5 period, but water companies can now press for an interim determination to allow them to pass some of the cost burden on to customers.

Non-urgent work

However, achieving this could take up to two years, says built asset consultant EC Harris utilities director Terry Povall. Accordingly, water companies could choose to postpone private sewer work that is deemed non-urgent.
The reason for the potential length of the interim determination process is that the companies must present robust evidence to support their case. Comprehensive data capture will likely play a major role in developing this evidence, says Povall, as predictive modelling will “enable water companies to demonstrate they are taking a thorough approach and ensuring that funding is invested wisely”. Water companies will also be seeking to establish a new procurement or supply chain strategy to improve efficiency and productivity. The point is to “build confidence with the regulator” and show they can “quickly deal with the additional workload created by the transfer”, says Povall.

Once all this is taken into account, it becomes clear that the impact of the private sewers transfer on the supply chain is unlikely to become manifest immediately. Work relating to newly adopted sewers will likely emerge in dribs and drabs.

Immediate opportunities

However, there could be some immediate opportunities in terms of training and advising water companies, which may have adopted private sewers comprising materials with which they do not usually work. For example, says British Plastics Federation plastic pipes group director Frank Jones, some water companies tend to use clay and concrete for their sewer systems and could find that staff members need advice on working with certain types of plastic pipe. The Society of British Water and Wastewater Industries (SBWWI) Private Sewer Forum said in June that “competency requirements and training issues” had been paid little attention so far. It could be that once water companies establish exactly what type of assets they have adopted, their requirements will become clearer and they may be more active in seeking training.

However, for some parts of the supply chain the private sewer transfer threatens not to bring work but to take it away. While private sewers’ previous owners - individual members of the public - were likely to deal with blockages and other problems by opening the Yellow Pages and finding a local contractor, water companies are more likely to use large contractors with whom they have frameworks in place.

Loose consortiums

However, Water UK has said that although many water companies will use their main framework contractors for private sewer work, those contractors may engage “local experienced drainage contractors” under sub-contract. It is also thought that small contractors may form loose consortiums to best position themselves for these opportunities. Severn Trent Water and Thames Water have both said they will consider opportunities to use small contractors. These contractors will also still find work from private drains within the property boundary and serving only one property, as these are not considered private sewers and will not transfer to water companies’ ownership.

Ultimately, the private sewers transfer remains a waiting game for now. Although 1 October is a significant date, it will not be the harbinger of sudden and speedy revolution - at least, not for the supply chain. The full impact of the ownership transfer will reveal itself more slowly, and the details of exactly what work existing private sewers will bring the supply chain are still clouded. New private sewers are an even greater mystery, as the Mandatory Build Standards for the design and construction of these, introduced under the Flood and Water Management Act, still have yet to be issued.

As the SBWWI Private Sewer Forum said last month, much about what private sewers will bring is still an “unknown unknown”. The supply chain must, for the most part, wait to see what comes out in the wash.

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