MWH
Getting the balance right through effective decision-making Ken Gedman, Director at MWH, now part of Stantec, says the industry is at a tipping-point. He says it’s never been more important to get the balance right between delivering outcomes, efficient delivery, maintaining a stable asset base and meeting ever increasing customer expectations. These often competing factors are adding increasing complexity to effective decision-making.
Water companies have a number of competing priorities as businesses and with the services they deliver. They have to deliver what customers value across a broad customer base in their regions and have to do this in the most costefficient and affordable way for their customers. At the same time they have to demonstrate to other stakeholders like regulators, consumer organisations and investors that how they do this, and the decisions they take, are the right ones across a broad spectrum of competing priorities. Getting this right engenders trust and confidence in the industry and demonstrates the value of these services to customers. It’s fair to say water companies have been doing this for a long-time now and we are in pretty good shape as an industry. Regulation and the changes that companies have had to adapt to since privatisation have been considerable. However, we are reaching some tipping-points that we need to consider: n Decision-making is becoming more complex with competing priorities from differing stakeholder perspectives – often with diverse perspectives; n The intent of idealised and complex decisionmaking is often compromised by the data and information available. This isn’t an excuse – it’s a fact; and n There is always a trade-off between shortterm pressures and long-terms needs, with differing stakeholder priorities falling into each of these categories.
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instituteofwater.org.uk
Here are some examples illustrating these points:
What if targets aren’t what customers want to pay for? Performance should be a commitment to customers not the regulator - Ofwat’s own words – which, arguably, should be one and the same. However, if companies build their plans and their commitments around specific, communitybased, customer needs, how does this fit with the regulator’s drive for comparative measures to challenge companies towards upper-quartile
performance? What if the targets set for upperquartile performance aren’t what customers want to pay for?
How can companies justify longer payback periods across multiple AMPs? Cost effective and efficient decision-making should consider forward-looking, long-term needs. But regulatory approval tends to be dictated by analysis of historical expenditure (based on historical decisions) and comparison to the previous planning period. Does that mean