Transforming water services – Irish Water and asset management
13 February 2014
Author: Jerry Grant, head of asset management, Irish Water
‘We value water as a precious natural resource on which the quality of life depends.’ This is Irish Water’s vision of the future.
The scale of our ambition for our customers is reflected in our long-term objective that, ‘Through responsible stewardship, efficient management and strong partnerships, Ireland has a world-class water infrastructure that ensures secure and sustainable water services, essential for our health, our communities, the economy and the environment’.
In this context, it is possible to appreciate the scale of the transformation project that has been delivered by Bord Gáis in establishing Irish Water. Within 15 months, Irish Water was set up as a fully functioning water utility, as a subsidiary of the Bord Gáis Group. The Irish Water Programme has enabled the organisation, people, processes and systems to be put in place in order to take responsibility for all public water and wastewater services in Ireland from 1st January, 2014.
This programme of interdependent activities delivered a complex multi-functional capability sufficient to manage a dispersed asset base including:
- 2,000 major plants;
- 100,000 km of pipelines;
- 1.8 million connections to domestic and non-domestic water users.
The functions include operations and maintenance oversight through service level agreements which have been finalised with all 34 local authorities, together with asset management, capital delivery, finance, regulation, customer services, human resources (HR), corporate affairs and communications functions.
The new utility draws heavily on the capability of Bord Gáis in terms of key functions of finance and funding, legal affairs, regulatory affairs, strategic planning and major strategic projects delivery. A number of activities in common across gas and water are provided by shared services functions comprising transactional activities supporting procurement, HR and financial support services. This has generated significant efficiencies compared to a stand-alone company.
Irish Water offers major opportunities for high performance management of water services, with new capabilities of asset management and customer support services, delivering major benefits to consumers in the medium term, as well as savings to the Exchequer.
IRISH WATER SERVICE LEVEL AGREEMENTS
Continuity of operations delivery is ensured through service level agreements with the local authorities. In addition, these agreements facilitate a flexible, collaborative relationship that enables a shared vision to be realised. The focus of the new Irish Water business is firmly on customer service as the necessary basis for success.
The delivery of transformational change and continuous improvement cycles, within the process of operating and maintaining the assets, in addition to managing performance and costs, will be achieved through Annual Service Plans (ASPs). These ASPs, in conjunction with the budget process, cover key objectives, performance, activities, change programmes, headcount and budget. The framework for these plans will be the strategic plans of Irish Water, to include:
- Water Services Strategic Plan (25 years): setting out the high-level policies and objectives of the business, subject to both a Strategic Environmental Assessment (SEA) and approval by the Minister of the Environment, Community and Local Government;
- Regulatory Investment Plans (5-6 years): setting out investment in water services and infrastructure, and the charges to consumers. These are subject to approval by the Financial Regulator (CER), following consultation with the Environmental Protection Agency, regional bodies and planning authorities and having regard to development plans
- Rolling five-year regional operating plans, within which each Annual Service Plan will be framed, defining the performance plans for each local authority.
Asset management is now well established across the world as offering the basis for the most cost effective service delivery that is dependent on the operation of a large spatially distributed asset base, especially where that is of variable age, condition and integrity. The system recognises that the best use of resources is achieved by managing the risk to service within acceptable limits, which in turn requires a full understanding of this risk and all of its dependencies.
The goal of Asset Management is to provide all customers with an equivalent level of service at least cost. This implies spending less money to achieve more, maintaining a stewardship of assets in the desired state, investing across whole systems and not their parts, with a whole life perspective. It draws on the integrated view of operations and investment, with all stakeholders fully engaged.
The basis for Asset Management, therefore, is a reliance on asset records with a high level of granularity, development of systems models which can predict capacity and future performance (taking account of growth in load demand and asset deterioration) and adhering to a set of asset policies and standards reflecting the required level of resilience.
To support this critical function, Irish Water is developing key asset management systems such as:
- An underground asset geographic information system (GIS) capable of containing full asset records to component level, and capturing real-time performance data in terms of operations, outputs and cost;
- Workflow management based on the ‘Maximo’ system and supported by field logging devices through which maintenance activities can be despatched to the field with the outcomes captured in GIS;
- Project planning through ‘Primavera’ system for the management of capital delivery projects to time and budget;
- Financial management via ‘Oracle’ customised systems for financial business management representing over €1 billion annual turnover;
- Realtime monitoring of above ground assets in ‘SCADA’ systems, affording visibility of key process, output and efficiency parameters, supporting intervention and contingency planning;
- Hydraulic models of water and sewer networks, verified to current loads, which enable effective investment decision making, both operational and capital, including predictions of impact of load variances, asset contingencies and external impacts such as climate change.
Asset management delivery in Irish Water will be delivered by three sub-functions covering:
- Asset strategy and sustainability: to develop the standards and policies underpinning sustainability of these services, asset information and reporting, as well as strategic planning for water supply and wastewater/sludge. This group is required to develop and maintain under review the necessary plans and records required to run the business, including capacity registers, models and forward plans;
- Asset investments: to manage the portfolio of programmes and projects, cost-benefit analysis and optimisation guiding prioritisation, oversight of budget risk and end-state review of costs and benefits;
- Asset programmes: to oversee the delivery of approved projects from concept to construction. In Irish Water, this has five workstreams of Major Water, Major Wastewater, Minor Capital, New Connections and Contract/Procurement Strategy.
The asset-management team works closely with the operations and maintenance function in sharing information, informing strategic planning, responding to operational experience and ensuring that agreed operational plans are effectively delivered.
Asset managers are required to establish the serviceability state of each asset and its capacity to deliver when operated optimally. The actual service level is then a function of the standard of operation.
Similarly, asset managers work closely with the capital delivery function, whose responsibility is to deliver the project through the contract in order to meet the quality, time and cost criteria against which it was approved. Irish Water is currently putting in place a suite of frameworks for its supply chain across goods, services and works delivery. This work has included a critical review of contract models, selection criteria and performance metrics to support best practice service provision.
Asset management is expected to deliver major efficiencies in both operational and capital investment, making best use of resources. It is widely acknowledged that the classic ad-hoc approach to investment projects can never meet the expectations across the service. At best it has delivered state-of-the-art plants for a time, immediately post investment, while the general asset base is neglected. This results in variable levels of service to consumers, which can lead to consumer dissatisfaction.
Asset management, when sufficiently developed, will deliver a more flexible investment model, designed to maximise the lifetime and performance of all assets. For the Irish water industry, this model recognises that the asset base will not be replaced within a generation; therefore a vastly improved performance must be achieved from what will be essentially today’s set of assets. This requires a mind-set change to one of planned maintenance, active operation and resolution of bottlenecks and points of weakness.
As an example, major leakage reduction must be achieved through an integrated approach to active leakage detection/repair, supported by automated pressure management, a focus on customer side leakage recovery and improved resilience in the system in terms of storage, internal transfers and full knowledge of all demand components.
This approach relies heavily on live system data, analytical tools, models and technologies, in addition to increased field resources. The approach will be greatly assisted by the rollout of universal metering across the customer base.
KEY INVESTMENT DRIVERS
In Ireland, there is recognition of a significant investment deficit in the water services sector. While water quality is generally good and has improved appreciably in recent years, there are currently almost 20,000 people on ‘boil water’ notices (as of January 2014). Many other schemes offer inadequate protection against microbiological risk or breaches of chemical standards, such as trihalomethanes.
In addition, the reduced lead standard of 0.01mg/l from December 2013 presents a challenge in relation to lead services in supply. Water quality is a priority in Irish Water’s Investment Programme 2014-2016.
The challenge is even greater for wastewater, as a majority of plants fail to fully meet license standards, as represented by the Urban Wastewater Treatment Directive, parametric limit value criteria from other Directives, and/or the objectives of the Water Framework Directive as defined in the 2009 River Basin Management Plans to be implemented by 2015. Separate to wastewater treatment, the issues around overflow discharges from foul sewers remain to be fully defined, with an unquantified liability to be addressed.
While these challenges are daunting, Irish Water must plan for a strong economic recovery to maximise our potential in the years ahead in a way that reflects the capacity of our country, its people and other resources. This requires that plans are put in place and that the capacity exists to deliver the major projects required to satisfy all social and economic objectives, consistent with sustainability principles.
This includes balanced regional development, supporting the opportunities in industry, agriculture and tourism across the country. This will require major investment in both water and wastewater capacity in the Greater Dublin Area within seven years, as well as ensuring headroom is maintained across the regions.
Irish Water is confident in meeting the challenge set for us by Government. We are conscious of the scale of the mandate, but certain in the people, systems and processes in place, based on the expertise and experience of Bord Gáis in partnership with the local authorities. Irish Water will deliver on behalf of our customers through careful stewardship of our assets on the basis of our expertise, efficiency and integrity in all of our relationships.
Jerry Grant’s article is based on a presentation to Engineers Ireland (Midlands Region) on 20 January 2014.http://www.engineersjournal.ie/2014/02/13/irish-water-service-asset-management/http://www.engineersjournal.ie/wp-content/uploads/2014/02/462291765-1024x683.jpghttp://www.engineersjournal.ie/wp-content/uploads/2014/02/462291765-300x300.jpgCivilBord Gais Energy,Dublin,Irish Water,local authorities