South West Water has spent close to £2bn over the last 18 years on a series of major projects under its Clean Sweep programme to improve bathing waters.
In the next AMP period the company is still going to be spending substantially - between £800M and £850M but the scale of the schemes is going to be somewhat different.
"In the last five years our supply partners have had some schemes like Torbay waste water treatment works that are worth up to £95M," says South West’s engineering director Graham Murphy. But the scale of projects has been getting smaller. "Now the average project value is £75,000. It’s all about consolidation."
Project values have been dropping over the last couple of years "and it has been a challenge for our partners and for us," Murphy says.
The company has five alliance partners - BAM Nuttall, Black & Veatch Contracting, Hyder, Pell Frischmann and Faber Maunsell. Together with South West they are already working as one integrated team. But going forward, the model needs to change again.
!"Our entire capital programme is now being split into Specific Investment Programmes (SIPS) - mini programmes across 82 streams of work," Murphy says. "At the moment we are clearly defining what needs to be done in the mini programmes. Then we have to group them so everyone gets a fair crack of the whip and can play to their strengths.
"We call it a mixed economy model. We are a bit anxious that large alliances are unwieldy for small projects. So we want to embrace all that’s good in alliancing - knowledge and skills sharing, continuity of work and engagement of critical staff etc." He then needs to create some internal competition, he says, so within the alliance "we will be comparing delivery performance against local providers who will be employed directly by the business."
"We are also splitting South West’s own internal organisation into two sections. There will be the strategic client which I will head with my project managers plus procurement and some operations staff. Everyone else, ie our partners and other South West staff will be in the alliance. "Then the challenge will be: there’s the programme, there’s the efficiencies we need, how do we deliver them?"