A wise investment

Speculation SW is to be privatised is reducing and the utility is vastly expanding its investment programme throughout Scotland

Scottish Water (SW), which is spending the equivalent £768 per household in its current (2002-2006) round of investment, is planning to almost double this in its next spending round. In what will be one of the largest water investment programmes in the UK, SW has been given the green light to proceed with further significant improvements over the period 2006-2010 that will bring its total expenditure to £1.8B over eight years.

The country’s publicly-owned water services provider has received a clear set of objectives and priorities through the Water Services (Scotland) Bill, which was approved by the Scottish Parliament in January 2005. The aims set out by the Scottish Executive are to:

  • deliver the maximum affordable investment in support of housing and economic growth in communities across Scotland,
  • protect public health by improving drinking water quality for 1.5M people,
  • safeguard the environment by improving water quality in some 500km of rivers, lochs and coastal waters,
  • tackle offensive odours at 35 WwTWs and remove more than 1,140 properties from the risk of internal sewer flooding,
  • ensure affordability by introducing a new 25% discount on water charges for households of two or more adults that are receiving council tax benefit.
  • Scotland’s water industry is one of the most rigorously regulated publicly owned bodies in the UK and, according to the country’s deputy environment minister, Lewis Macdonald, is delivering a large investment programme while maintaining stable charges to customers. He said: “We have consulted widely to determine the investment needed to improve public health and service levels and address development needs. We have been clear that this programme must be delivered without the need to increase average charges by more than the expected rate of inflation during 2006-2010.”

    Under the bill, SW will retain sole responsibility for delivering all water and wastewater services and continue to be the sole retailer of these services to domestic consumers – reducing expectations the industry is heading for privatisation.

    However, the bill also provides “a robust legislative framework to regulate licensed retail competition in the non-domestic sector only”. Macdonald emphasised the objectives laid down for SW address customer priorities and apply the principals of sustainable development within the new regulatory framework established by the bill.

    New regulator

    The bill also makes provision for the setting up of the country’s first Water Commission. The commission will replace the existing office of Scotland’s solo Water Industry Commissioner (WIC), Alan Sutherland. The new commission, which will become effective in July, will comprise six members, including a chairman and a chief executive, and be responsible for the interests of customers “through the robust and objective economic regulation of SW”, according to the bill. The commission will be funded through a levy on water charges.

    The bill states “establishing the commission will improve the accountability and transparency of economic regulation, by replacing the current individual WIC with a body corporate. The commission’s principal roles will be to determine the charge income SW requires to achieve ministers’ objectives at lowest overall reasonable cost, to monitor and report on SW’s performance, and to control through a licensing regime the provision of retail water and sewerage services to non-domestic customers”.

    When in place, the commission will become responsible for concluding the 2006-2010 Strategic Review of Charges the present WIC has started. The commission will be based in Stirling and have a full-time staff of 16 people in five teams, covering costs and performance, investment and asset management, revenue and tariff, competition and customer service and corporate affairs. Alan Sutherland’s final act as water commissioner will be
    publishing and consulting on his proposals for future water charges,
    at the end of June.

    Rural water provision

    Another legislative change being considered by the Scottish Executive is covered in the publication of draft regulations to bring private water supplies, unconnected to the public network, up to accepted standards. The proposals include plans for a grant scheme to provide financial assistance to meet the costs of upgrading supplies.

    Macdonald said that also included in his draft proposals
    was the use of risk assessments ‘from source to tap’ as part
    of an effective surveillance programme. Around 150,000 Scots
    living in rural locations and many thousands more, including visitors, rely on private water supplies. Macdonald said: “When introduced, these new regulations will put Scotland at the forefront of international efforts to protect the health of users of private water supplies. To help meet the costs of upgrading, we intend to introduce a grant scheme with financial assistance.”

    Following the consultation period it is planned to bring the
    regulations into force at the earliest opportunity. Regulations will be accompanied by detailed technical guidance for local authorities. It is understood many users will have to invest in new equipment in order to raise standards of their supplies.
    While proposals to upgrade non-mains supplies are being drawn-up, work continues on Scotland’s largest municipal water scheme. The £120M Katrine Water Project, on which almost three-quarters of a million people in the Greater Glasgow area depend to deliver their water supplies well into the next century, is well on target for
    completion, according to SW. The Katrine scheme, the most significant and high profile development in SW’s investment programme, includes a new WTW and a service reservoir that will store up to
    80M litres of treated water.

    A second reservoir to supply elevated levels of the area is also on schedule. Work began recently on the pumping station that will draw a total of 240Ml/d of water every day from Mugdock and Craigmaddie reservoirs, both of which receive their supplies from Loch Katrine – one of Scotland’s largest fresh water catchment areas.
    Gus Watt, Katrine Project manager, is optimistic the construction work will meet the completion date: “Exceptionally wet weather during the autumn of last year caused delays in the earthwork but since then we have made steady progress.” MJ Gleeson, the contractors responsible for building the replacement WTW said one of the main challenges is the construction of complicated of pumping station, tunnel and intake structures.

    Contract manager Mark Allan said: “Each of the two tunnels required has an intake structure which is to be built within the existing reservoirs, while the embankments and surrounding infrastructure are all of listed building status. This means that client, contractors, sub-contractor and designers are all working together to meet the challenge of delivering this technically difficult element of work within such demanding constraints.”

    On a recent visit to the site, Dr Jon Hargreaves, chief executive of SW, said: “We are delivering an historic project which, on completion, will supply water quality that most other cities have taken for granted for a considerable time.” When completed, the Katrine Water Project will improve the quality of water supplies to not only Glasgow but also to almost 50,000 residents in East Dunbartonshire, 21,000 in East Renfreshire and 40,000 and 35,000 in South Lanarkshire.

    Further water quality improvement projects are under way in the remote highlands and island regions of Scotland. Water customers in this large area will benefit from a £100M investment programme SW claims will bring to an end the days when some customers had to put up with water as ‘peaty as a dram of Islay malt whiskey’.
    Currently SW has 203 WTWs in its north-west operational area alone, compared to Yorkshire Water’s total of 90 and Northumbria’s 67, with some remote works delivering services to less that a dozen customers. Providing drinking water can mean sinking boreholes to great depths, rock blasting, building access roads and attaching floats to pipes across lochs.

    Solving problems in Glen Convinth

    One of the most recent SW projects under way was visited by Macdonald, at Glen Convinth, the site of a new £9.5M WTW for approximately 6,800 customers in Drumnadrochit, Beauly, West Inverness and Glenurquhart. In recent years, some customers in this busy tourist area suffered coloured water, which could clog up shower heads and there have been supply problems during dry weather. The works under construction has been designed to solve those problems. The water will be taken from Loch Bruicheach and the new works is expected to produce 3.5Ml/d of drinking water.

    According to SW’s north-west general manager Joe Moore: “For some of our customers, a WTW has meant an intake from a peaty burn, a basic filter and a dash of chlorine. At one time this was a considerable improvement on simply taking water from a local source and using it, but it is not good enough for customers in the 21st century.” During the investment period SW is building or refurbishing more than 90 WTWs in the highlands and islands.

    Scottish Water Solutions area delivery manager Stewart Davis said: “The north-west stretches from Thurso to Fort William and takes in the northern and western isles. It is a huge area with a range of issues. We are tasked with raising the water quality for residents who have traditionally taken their water from burns or lochs. This may require a treatment works for a population of just a few houses.”
    He added: “Concerns about the declining dolphin population around our coastlines, for example, have meant special consideration to be given to wastewater treatment issues. The remoteness of
    some of the communities also makes mobility of the workforce
    difficult in getting from one project to the next. Despite these
    challenges we are progressing well with some 200 projects
    with a value of approximately £150M and are on schedule to be
    substantially complete by the end of 2005.”

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