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Water: Asset management ideas amplified

Should the changing focus of the water sector be seen as a threat or an opportunity? Margo Cole speaks to one engineer who believes AMP6 offers the chance to be far more imaginative.

Pointing the way: The next asset management plan is likely to lead to more operational solutions and less new building work

The next asset management plan is likely to lead to more operational solutions and less new building work

Engineers working in the water sector are just starting to understand how different the demands of the forthcoming asset management plan (AMP) period are likely to be from previous AMPs. After 20 years of focusing on building new facilities to meet water quality and environmental legislation, water regulator Ofwat now wants water companies to take a more holistic view of their assets.

Commentators widely agree that a so-called ‘totex’ (total expenditure) approach is set to drive more ‘no build’ solutions. So what does this mean for a generation of water sector engineers that has grown up designing and constructing major chunks of heavy civils and process infrastructure?

MWH product line leader Ajay Nair believes engineers should be excited at the prospect of using their imaginations.

“We are currently in the fifth full AMP. The first was exciting because it was all very new, but it became very prescriptive,” he says. “It was exciting because we were engineering and building new things, but it wasn’t that challenging.”

As a result of driving efficiencies, the imagination of engineers has been suppressed

Nair says that in the last two spending periods, AMP4 and AMP5, the emphasis shifted to becoming more efficient in delivering design and construction. This led to developing some “great methodologies”, he says, such as off-site and modular construction and standard packages and designs, but it also led to most engineers becoming “a bit samey”.

But with the upcoming AMP6, due to start in April 2015, Nair says water companies are moving away from being capital delivery organisations because they no longer have drivers associated with spending money on “building stuff”.

“How they spend their money is now going to be about being more efficient as an organisation - more akin to manufacturing organisations than big capital delivery,” he says.

“For me, it’s very exciting. This is waking up the sleeping giant that is engineering. What I have seen over the last few years is that, as a result of driving efficiencies, a lot of the imagination of engineers has been suppressed, to the extent that we may have lost a bit of it,” Nair adds. “We have to challenge ourselves to reinvigorate.”

Responding to change

Already, water companies are responding to this change in emphasis by taking on firms like Cap Gemini, Accenture and IBM for their expertise in business management and data analysis. Nair says they should not be seen as a threat.

“What we are seeing is some other sectors looking at water and wastewater and saying ‘we could add value’, so it’s down to engineers to embrace these views and skills,” he says. “I think we’re seeing these other people come into it because it suits their skill base, but what you start to see is a symbiotic relationship.

“They’ve realised that they don’t have the acute engineering knowledge to answer some of these questions. Management consultancies are asking different questions and, as that triggers our innovation, we’re asking different questions,” he adds.

I think the engineer of the future will be cognisant of the design and engineering, but will be more focused around the solution

“To me it’s quite exciting. By working together we will see the value of engineers starting to increase. If we are isolated, we will fail; but together we will form something that’s extremely strong.”

With AMP6 less than a year away, Nair says the industry is “at a bit of a juncture”. Any hard engineering that is done must still be done in the most efficient way possible, so the skills that have served well in the last three or four AMPs will still be needed. But, he says, “we have to take some of those guys and try to open up their imagination” in order to address what he calls the “totex landscape”.

“I think the engineer of the future will be cognisant of the design and engineering, but will be more focused around the solution - whether it is design, no-build or o pex [operational expenditure],” he says. “It’s a change for ourselves - the supply chain - and it’s a change for the client in the way they behave.

“To me that’s where the excitement is. We’re going to do a lot more asset optimisation, and we will see a massive step-change in the way we start viewing asset management,” he adds. “We will spend more time working with the client at the coal face than ever before.

“We’ll all be looking at things very differently, and the opportunity for innovation is higher.”

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