SEMBCORP BOURNEMOUTH WATER LIAISON MEETING
THURSDAY 29 SEPTEMBER 2011
Sembcorp Bournemouth Water supplies high standard drinking water and provides
excellent customer service. Last year SBW were assessed (for the second year in
succession) by the regulator as providing the best overall water supply service of any
water company in England and Wales. SBW serves around half a million people in an area
from Poole in the west to Beaulieu in the east and north to Salisbury
Attendees: Roger Harrington, Managing Director
Peter Ferenczy, Asset Manager
Tracey Legg, Regulations Manager
Mike Redjab, Purchasing Manager
Nigel Tonge, Radius Systems
Carl Bradley, 3M
Naval Phandey, ChemResist
Richard Hennessey, Burdens
Conleth Greene, Farrans
Carol Hickman, SBWWI
INTRODUCTIONS - ROUND THE TABLE
In advance of the main discussions, each delegate introduced themselves by name, job
title and company activity.
SEMBCORP BOURNEMOUTH WATER UPDATE
Roger Harrington reported that until July 2010 Bournemouth & West Hants Water was part
of Cascal (58% owned by Biwater and 42% listed on US stock exchange). B&WH was then
acquired by Sembcorp, a Singapore listed group, in July 2010. Sembcorp has a Marine
and Utilities activity, which includes energy, water, waste, etc. RH commented that
Sembcorp is a robust operational company and the acquisition is part of their long term
plans. Further details on Sembcorp Industries can be found on www.sembcorp.com
As a result of the purchase SBW changed its financial year end to December (rather than
March). The accounting systems are also changing and, in line with the Group, SBW is
installing a SAP system.
o A model for the next AMP period is expected from Ofwat over the next few weeks and
it was anticipated that efficiency and economies of scale would feature heavily
o Water White Paper expected in October/November
o TL commented that SBW is due to issue access prices at end of next week but is still
waiting for Ofwat guidance.
o The Annual reporting requirements have changed in the way companies show Ofwat
how they are performing. Changing times are ahead and it is anticipated that Ofwat
will have a 'lighter touch' on company business plans.
o SBW has changed auditors to KPMG
o A new Financial Director, Peter Bridgewater is now in place
o A small number of customer complaints had been received on the rebranding.
SBWWI SUMMARY OF ACTIVITIES SINCE THE LAST MEETING
CH provided a summary of SBWWI’s activities for the current year and its aims for 2011/12:
o Increased membership year on year taking member number to c110 – 12 new
members this year
o Representing UK manufacturers and contractors (both large and small), training
providers and consultants, with a combined turnover in excess of £3bn, employing
c30,000 people and member type covers a wide-ranging selection of 1st tier
contractors and manufacturers down to smaller, specialist companies.
o Water Company liaison schedule continuing throughout 2011/12 including Regulators
and other industry organisations – majority of companies either met or scheduled to
meet in 2011. CH confirmed that SBWWI held an annual meeting with NJUG to discuss
issues affecting utilities and their contractors. It was agreed that there remains some
anomalies where the Highways (often seen to be the worst offenders for traffic
congestion) are not bound by the same rules as the utilities. RH reported that SWB had
signed up to the NJUG best practice charter.
o Continue to provide a number of informative forums and other activities:
o Utility Connections seminar held on 12 April 2011 at Chesford Grange, covering
sustainable solutions – undertaken jointly with the gas industry. Although good
speakers and informative sessions, it would probably not take place in 2012 due
to the continued slow activity in housing development
o Leakage and Metering seminar 22/23 November 2010 – Coventry University plus
2011 – this year's event to be held on 5 & 6 December at Trident Business Centre
entitled GET SMART – a draft programme was included in the information pack.
One complimentary place is available for each water company, with further
places available at member rate.
RH commented that SWB had been slowly metering over the last 10/15 years,
based mostly on change of occupier. However, success in managing demands
has created a difficulty in trying to make an economic case for continuing with
meter installation, although Ofwat had been helpful in this respect.
SBW anticipates that by the end of AMP5 70% of customers would be metered. The
housing market is fairly slow, so change of occupier metering is slowing down and
optant take up is lower. The case for smart metering is also difficult to make.
o PDaS seminar covering transfer of private sewers plus 'meet the buyer'
event.....reached capacity....120 delegates attending a great networking
event. Follow up seminar to be organised for April/May 2012 '6 months on'.
o The Private Sewers Forum, continues its good work, looking at the implications of the
transfer on UK businesses etc. The Forum comprises representatives from a number of
different organisations where information can be disseminated at the same time to
their individual memberships.
o Water Dragons continues into its 4th year, taking place on 17 October.
o Supplying for the Future was produced in 2009 and was SBWWI's first 'position paper',
followed by Procuring for the Future which was launched in 2010 at the APPWG
Parliamentary Reception on 6 December. The next position paper will focus on Skills
for the Future – a workshop was held on Thursday 15 September to identify the content
with the publication being available for the Parliamentary Reception being held on 28
o Sponsored the APPWG’s ‘Future Water 2011’, held on 13 July at the National
Geographical Society, London and continues to sponsor the APPWG secretariat. This
sponsorship has proved very useful for SBWWI and its members and has 'opened a few
doors' with Ministers, etc. Richard Benyon provided a foreward for our 25 anniversary
o The Intelligent Metering Initiative, formed in 2008, closed in early 2011, following
insufficient funding to continue. However, SBWWI is working closely with OFWAT and
their Smart Metering Advisory Group (SMAG) and jointly organised a seminar on 15
June at Ofwat offices. Further workshop proposed in October/November 2011
focussing on supply chain. The water companies are looking at data specification
requirements through the Water UK smart metering networks group
o Met with Dr David Gray to discuss SBWWI’s comments on the Review of Ofwat and
CCWater. David Gray very interested in the issue around the peaks and troughs
caused by the periodic review cycle. This continues to be a problem for the supply
o AGM and Awards Lunch – Wednesday 2 November 2011 Hilton Hotel, Warwick –
invitations currently being sent out.
o USIT - Eight SBWWI members received up to £7,500 each in 2011, totalling c£45,000. In
addition two places were awarded to SBWWI members (2010) to attend a week at
Harvard Business School – £15,000 for both. The closing date for the 2011 award is 30
September. Tony Cooke remains on the USIT Board.
o SBWWI’s Silver Jubilee dinner held on 8 July 2011 at Chesford Grange Hotel,
Supplying for the Future had been developed as the SBWWI’s Strategic Direction
Statement, and outlined the Society’s aims and ambitions for the future and how
members can help the water companies. During the preparation of the document, and
further discussions with SBWWI members, it was evident that procurement was a big issue
amongst the membership and SBWWI decided to investigate this further and produced
Procuring for the Future.
Members were surveyed for their views (positive and negative) on the processes of AMP5
and a members' workshop held in February 2010, where a representative from one of the
larger water and sewerage companies was present to provide a balanced view.
Following the discussions SBWWI put together some positive proposals/suggestions within
the Procuring for the Future publication, which has since stimulated a fair amount of
debate. Copies were available at the meeting. Ultimately, SBWWI would like to see some
cross-sector forum established to improve the whole procurement process.
SEMBCORP BOURNEMOUTH WATER
Update and overview of changes in structure and organisation since previous meeting
(2008). Roger Harrington confirmed that an SBW structure chart would be forwarded onto
CH for circulation with the minutes. A copy of the Advance Information Template for
2011 is attached.
SBW Investment – Roger Harrington reported
o Infrastructure maintenance- mostly replacement of old/poorly performing mains
o Minimal rehab work
o Average age of mains is c50 years
o Very few engineering or construction projects over £1m – rarely have multi-million
o At the moment mainly smaller programmes of work, with minimal changes to this
process for AMP6.
o PF reported that there had been significant investment from 1995-2010 in above
ground infrastructure and activity is now mostly the maintenance of this – much more
about maintaining the asset stock.
o RH commented that SBW has been working on improving the resilience of the system
and one area of activity may be on increased infrastructure renewal
o SBW does not have a lead issue.
o SBW is keen on Trenchless Technology, principally directional drilling to alleviate traffic
disruption and the impact on the community. SWB is a Patron member of the UKSTT (for
which SBWWI provides the secretariat)
SBW is currently replacing about 0.4% of its network per annum.THe company has not
had legacy water quality issues. .
o The period contractor, Carillion - is undertaking the infrastructure work, with the
contract coming up for renewal in either April 2013 or April 2014.
o There will be no civil engineering work over £1m.
o May spend £3 to £4 m on trunk mains work if SBW can get it through Ofwat.
o There is no large industrial development scheduled in the area
o SWB customer base is generally an ageing, more affluent, population, with only up to a
1% customer increase per year.
o Olympics are having an affect in the Bournemouth area as it is a transport corridor to
Weymouth, where the sailing is taking place. There will be bans on utility work
throughout the Olympic period and the lead up to it.
MR reported that a joint procurement consortium – the Procurement Hub – has been
established, which includes Wessex Water / Bristol Water/ Bournemouth / Wales & West
and Welsh Water, which will be looking for opportunities to collaborate to provide security
in the market place. It is a great opportunity for everyone in the South West, with benefits
in sharing transportation/backhauling and some leverage through pricing. South West
Water is not in a position to commit to the consortium at the moment.
o Progress v Plan - - RH reported that, 1.5 years into the programme, SBW is fairly well on
target to achieve plan, although slightly behind on spend for the current year.
o Contracts and renewal policy – current main contractor for AMP5 infrastructure repairs
and maintenance is Carillion Civil Engineering Ltd. SBW does not have framework
contracts as there is insufficient continuity of projects. SBW runs a traditional contract,
based on schedule of rates, etc. and has worked with Carillion on minimising costs, ie
joint purchasing, fuel, etc. Contracts are fairly traditional design and construct, without
the use of too many consultants. Tend to use NEC 3 or iChemE process. Would favour
local contractors where possible.
o Procurement arrangements – as reported at previous meeting – through the
consortium or approved list. SBW have now joined Achilles and use the uvdb (utilities
vendor database), but have not signed up to Verify. Although Achilles can be
onerous for some, MR commented that it was vital for suppliers to ensure their details
are correct and updated and to also ensure their details are listed in the right
categories for the activity, rather than add their details to all categories. The newly
expanded consortium may look at inviting suppliers round the table to look at new
contracts, etc. (potentially at polyethylene pipe) and to show their products.
SWB has a small direct labour M&E force undertaking repairs and maintenance -
preventative/reactive but the large majority of work ins undertaken by the term
contractor. If there are issues with resources, it is not unknown for both SBW and
Carillion to put crews together to get the job done.
Preferred M&E contractors Peter commented that a number of local M&E and Civil
contractors that are used. The list of approved contractors is open to companies
wishing to work with SBW - contact can be made through PF. Specialist contracting
work would go to specialist contractors. In addition, reservoir refurbishment would be
undertaken by national specialist companies who can provide a niche service.
o Leakage figures and targets – SWB has met its leakage target (22mgld), following a
challenging and cold winter. There are no plans to reduce the leakage target further,
although interruption of supply can account for part of the SIM scores. RH
commented that, because of its younger infrastructure, SBW’s figures for interruption of
supply are about 10 times better than the industry average. SBW aims to be in the
upper quartile of the SIM.
o Metering policy and proposed metering penetration – see earlier comments under
o Carbon footprint/reduction – RH commented that supplying and pumping of water is
energy intensive, and SWB has refurbished or replaced most of its major pumping
stations. There is also some work planned for installing solar renewables on some of the
sites, which fits with the general ethos of reducing carbon footprint.
Are you looking at the embedded carbon footprint of equipment? RH commented
that this is taken into account and was included in part of their business plan.
Would you consider recyclability at the end of life? MR confirmed that SBW will always
look at what it would cost to dispose of equipment (pumps, motors, etc.). Most of this
goes through a contract. RH commented that a simple guide/framework would be
useful to help with decision making but reiterated that the less energy that is used, the
less the carbon footprint would be.
o Innovation – Mark Burton would be the right contact for any water quality innovative
products. Any innovations coming through SBW would be passed onto the consortium.
The possibility of the SBWWI Innovation, Research & Development (IRD) Group setting
up a mini roadshow was discussed and considered to be of value. A further possibility
was raised for water companies to forward specific issues/problems to the IRD group
who could respond with potential solutions. Further details to be provided by SBWWI.
o Climate Change. All water companies had to produce adaptation change policies
and these will be available on the DEFRA site from January. SBW’s plan sets out how it
will manage risks to the services – rising water levels, extreme events, etc. The Water
Resource Plan takes into account climate change, demand, etc. SBW is ensuring that
as knowledge improves about what is likely to happen and it moves forward, the plans
are adapted to suit. ie SBW has identified a number of areas of river flooding in
extreme events and has now developed flood defence projects.
TL commented that there may be changes with water trading, where Ofwat has
suggested that those companies with surpluses could be mandated to offer it to others.
No concrete information available. RH commented that Ofwat aims to have more
efficient solutions with less investment. RH did not consider that a national grid would be
established but there may be more inter-connections between regions, which would
require more scrutiny by the regulators.