‘Committed to change’ say water company bosses

A commitment to change, a focus on sector resilience and protecting investor confidence are key to the future of the water sector, according to an engaging session led by two water company chief execs last week.

Yorkshire Water Services chief executive Richard Flint and his counterpart at Severn Trent Water Tony Wray presented delegates at last week’s Westminster Energy, Environment and Transport Forum – ‘The future of the water industry post White Paper’ – with a lively two-hander highlighting the absolute need for change going forward.

In his address, Mr Flint said, “the tactics and strategies we’ve used are not necessarily going to be the ones that get us where we need to be… simply building big pipes everywhere is not the answer”.

Mr Wray was even more concise in the opening comment of his presentation, which read: “carrying on as we are is not sustainable”. He urged delegates to look at the White Paper as a tipping point, and to use it to drive the industry forward. “The case for change has been made and the direction is set,” he said. “What’s required is a commitment to change.”

However, while both were broadly positive about the ‘roadmap’ set out by the paper, Mr Flint pointed to what, in his opinion are its shortcomings: That it doesn’t address the issue of the water industry’s carbon footprint, that there’s no incentive for greater renewable energy innovation in the industry and that it’s a missed opportunity to give water and sewerage companies a greater role to play in water management.

That said, Mr Wray believes water companies have a massive part to play in driving change, but that current systems and regulatory cycles will need to change too. “We need to be weaned off that capital dependency,” he said, as the industry should be looking more towards total expenditure solutions rather than just capital expenditure.

Both agreed swift, radical change was not the answer but, as Mr Flint put it, it will happen “by thoughtful change, by bringing people with us, by bringing communities with us… careful, signposted, evolutionary change is of fundamental importance”.

Water UK director of economic regulation and market reform James Bullock, also speaking at the forum, echoed Mr Flint’s words, saying: “Industry changes need to be well thought-out, timely and with clear guidelines as to responsibility, or you risk damaging investor confidence, thus increasing the finance needed for the sector, thus increasing customer bills.”

He praised the paper as being “absolutely aligned with our priorities”, adding that, “to sum up the core of the White Paper in one word I think it would be resilience”. However, how resilience is delivered going forward is the question which needs to be answered. Key, he said, is a catchment-based approach, which works, “because water companies have an interest in protecting the health of their catchments. Maintaining the resilience of those catchments builds and protects the company’s own resilience.” However, he asked, “when push comes to shove, will competing players do the right thing?”

Will Parsons

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