WaterBriefing AMP6 & Totex Survey
The WaterBriefing AMP6 & Totex Survey
WaterBriefing has launched the first of a series of surveys looking at key operational and strategic issues during the UK water industry's Asset Management Programme 6 (AMP6), with a particular focus on the impact Totex (total expenditure) is having on the water sector.
The survey programme was launched in the early stages of AMP6 to benchmark key issues surrounding Totex, with a view to encouraging debate and discussion on topics of significance over the next five years.
The objective of the survey was to determine whether, and if so to what extent, a Totex approach is creating a different mindset and prompting UK water companies to re-examine current practice regarding the maintenance of existing assets. As well as taking a ‘snapshot’ of water company readiness for Totex principles at the start of AMP6, it was decided that the survey should also focus on a specific process area that would have a significant impact on plant operation and maintenance. The process that was chosen was grit removal.
Respondents felt strongly that Totex is far from being embraced in the UK water sector – and that, in particular, water company levels of acceptance were low among Operations and Maintenance personnel, and also low among middle management who, as one respondent described it, present a "treacle layer" working to outdated systems. They also agreed that there was a lack of discussion between budget holders within organisations.
Respondents considered that the UK water industry is failing to embrace a Whole Life Cost approach, despite agreement that such an approach would encourage innovation that can in turn drive lower operating and energy costs – benefits that can be passed on to the consumer.
This disconnect was borne out in attitudes to grit removal. The vast majority of respondents acknowledged that grit build-up has a damaging impact on downstream processes. However, many considered that the consequent burden of maintenance and equipment wear was inevitable. Yet, at the same time, respondents strongly agreed that better grit removal would help water companies to achieve Totex objectives. Interestingly, the sense of opportunity for improved performance was reflected in the comments of downstream equipment suppliers, such as pump manufacturers, where reduced amounts of grit would positively impact the performance of their equipment.
Frustrations and barriers were clear, both in the emphatic answers provided and from reading between the lines of people’s comments. There was a strong feeling of resistance to change mindset to a Totex approach, and in fact, even a lack consensus on what 'Totex' really means.
There was a palpable sense of frustration among the equipment suppliers that took part in the survey. There was strong agreement that a 'lowest price up-front' procurement model persists; as one commenter put it, there is a “race the price to the bottom” tendering process. The impression given was that the conflict between Totex aspirations and the reality of procurement practices in water companies was acutely experienced right across the supply chain, both from contractors and equipment suppliers of all types.
AMP6 & Totex
Most people believe that the UK water industry is not yet ready to meet Totex objectives, or that, if it is ready, it has still to change. Only a small group believed the industry was already changing.
There was strong agreement that resistance to change, a lack of consensus on what Totex really means, and a mindset split between Capex (capital expenditure) and Opex (operational expenditure) were all significant barriers to change. The fact that a lowest price-up front approach still prevails was judged the most significant of all the barriers suggested.
The survey results confirmed a picture that people felt acceptance of Totex principles varied significantly across levels of water company personnel, but the overall picture was of low acceptance. In particular most people felt that middle management had not yet fully accepted Totex, and that the situation was more pronounced for operational staff, with 40% believing they had not accepted it at all. Respondents were equally split on whether senior managers had accepted Totex or not.
There was strong agreement that a move to Totex would encourage more innovation and that reducing operating costs and through life equipment efficiency, including energy reduction could be drivers for change. However, some people added strong opinions suggesting an experience that procurement approaches in water companies are hampering innovation that could improve whole life costing.
Respondents overwhelmingly recognised the potential of effective grit removal to contribute to reducing Operating and Maintenance costs and energy saving.
The majority also believed that water companies are currently accepting a compromise in grit removal, even though they agreed that ineffective removal leads to excess wear of parts and equipment, reduces treatment capacity and the effectiveness of biological processes.
Most people felt grit build-up in tanks and digesters was inevitable and that grit incursion leads to increased maintenance costs with the need for more frequent clean out. The majority also felt that inadequate grit removal adversely affects the energy usage of a plant.
Full survey results and findings
Get the full survey results and findings here: WaterBriefing AMP6 & Totex Survey.pdf