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Water: The importance of connections

For many developers, one of the biggest headaches when it comes to programming a major project is the issue of getting the site connected to the local utility networks once the building or development is complete.

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Clear vision: Complex connections on major projects require a high level of co-ordination

Dealing with an array of different local utility companies - all with their own lead-in times and programme requirements - can add significant time onto the length of the project programme, as well as requiring considerable resourcing to manage.

This situation came about because, in the past, the job of connecting water, electricity, gas and telecoms supplies to any new development was entirely the responsibility of the local network owner.

However, as part of their stated aim of increasing competition in their respective markets, both water regulator Ofwat and energy regulator Ofgem have, over time, introduced rules that make it possible for any company with the appropriate accreditation to compete to install these connections. As a result, a new industry has sprung up, with some companies offering a service of designing, managing and installing all of the connection work- so-called “multi-utility connections”.

When competition was first introduced, the incumbent utilities had to separate their own design and installation activities so new entrants could compete. Since then, competition has increased step by step for the various parts of the connection chain from inside the development to the point of connection with the existing utility network, to the situation now where one firm can take on the whole lot.

“We know how difficult it is for an engineer to get a connection,” says Dave Shaw, head of business development at Veolia Water Infrastructure Services, one of the firms that is particularly active in the multi-utility market. “One of the values we bring is that we understand the hoops you have to jump through, so we can either help you jump through them, or jump through them for you.”

Shaw says using one firm for all the connections offers a range of benefits to the developer, including cost savings of 10% or more, programme and cost certainty, and contractual guarantees. The cost savings come from being able to negotiate a competitive price for the work - making use of the connection firm’s ability to selectively buy equipment, for example - and from the possibility of value engineering the entire connection process.

This is particularly true for complex electrical connections, especially on projects that include some form of power generation, like an energy from waste plant, wind turbines or anaerobic digester. “If the development has a large electrical load or distributed load, then the process is even longer,” says Shaw. “You can’t just plug that straight into the network.”

Dave_Shaw

“One of the values we bring is that we understand the hoops you have to jump through”

Dave Shaw, Veolia Water Infrastructure Services

In energy regulator Ofgem’s 2011 review of the connections market, it said that over the previous two years the number of connection projects that included distributed generation had increased by 250%, much of this in response to planning requirements for on-site generation. Building Regulations and planning requirements for energy efficiency and water efficiency measures, such as grey water recycling, are also on the increase - again adding to the complexity of the connection regime.

Shaw says that, rather than thinking of the utility connections as something that needs dealing with at the end of the construction, it should be thought about much earlier in the project - even during the design phase if the scheme is particularly complex: “We can help to optioneer the design of electrical, gas and water on site, and look at issues like security of supply, and the savings - both cost-wise and in terms of time - can be quite considerable.”

One of the most appealing aspects of a multi-utility connection solution for a developer is the certainty it can give to the programme. As Shaw says, the traditional approach, in which each connection is made by a separate company, can involve “having to book the water guy in first, and then the gas, then the electricity - and then at the last minute the water guy says he can’t make it that week, so you have to put everyone else back”.

Using one firm to manage the whole process means the construction manager just enters into a firm arrangement with one party, to deliver all the connections at a certain time and at a fixed cost. “Contractually and commercially we are happy to agree to a contract, and we will sign up to a fixed cost and will look at liquidated damages, and that sort of thing,” says Shaw. “It’s a much more normal contractual relationship.

“Obviously we liaise with the host water, electricity and gas companies to make sure the connections are built to their specification if they are going to be adopted,” he adds. “We also work with the local authorities on traffic management, because that can make a huge dent in the programme.

“Because we are entering into a contract, we’ll give you a programme that identifies exactly when we plan to do everything, and agree that with the engineers who are building the development.”

Although competition in the connections market was first introduced in the 1990s, take-up for multi-utility work is still slow. In 2010 Ofgem reported that the share of gas connections carried out by nonincumbents - ie not the local utility network operator - was 59%, but for electricity connections it was just 13%. Shaw says that, as the UK economy starts to improve and developers understand the benefits these figures should increase.

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Greater Manchester Waste

In 2009 Costain won a five year contract from PFI concessionaire Viridor/Laing to provide the infrastructure required for a 25-year, £3.8bn recycling and waste management project in Greater Manchester.

Costain instructed Veolia Water Infrastructure Services to design, build and commission all the offsite electricity, gas and water infrastructure for a total of 26 sites, including 20 household waste recycling centres, five mechanical biological treatment facilities and one thermal recovery facility.

The contractor provided the electricity, gas and water infrastructure requirements for the sites, which the Veolia teams used as the basis for its designs.

“Next, we set about tracking down the various asset owners and getting them to approve our designs,” says Veolia project manager Steve Eccles.

“Managing the asset owners was a key part of ensuring the project’s success. Before construction could start, we also had to liaise with the local authority, to gain their agreement of the programme of works, and to obtain the S50 [streetworks] licence.”

The building programme featured multiple engineering difficulties, including bridge crossings over canals, motorways and railway lines.

“Some of the old bridge crossings didn’t have enough cover to lay a gas main at the usual 750mm depth, so we had to obtain the asset owners’ permission to lay it just 500mm deep, and agree protection measures in advance,” says Eccles.

Once all the designs were agreed and the permissions were in place, Veolia designed, built and commissioned the network connections for more than 15km of 11kV electricity cable, water mains and gas mains.

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