Capital maintenance planning and the AMP4 challenge

A new common framework for capital maintenance planning is being developed under an UKWIR project in association with Ofwat, DWI, the EA, the Water Commissioner for Scotland and DEFRA.The contractor is Tynemarch Systems Engineering in association with Stone and Webster and Strategic Management Consultants.
Initial findings and recommendations from the study are currently being incorporated into an interim report for circulating to the industry and will provide the basis of an UKWIR work-shop on 2 October.

The €˜common framework€™ proposed is based on the approach applied by Ofwat at the 1999 periodic review in that capital maintenance requirements will continue to be assessed using a set of indicators of serviceability to customers and the environment, but extended to include forecasting of likely future asset performance and serviceability, reflecting both past trends and the impacts of relevant asset criteria.

In response to recent direction provided by DETR (now DEFRA) and Ofwat, the Common Framework is based on the analysis of risk and encompasses an economic approach to the assessment of both operational and capital cost interventions. This allows the economic level of capital maintenance to be assessed with due regard to the costs associated with asset failure and (where appropriate) to the value placed by customers on service improvement.
Within England and Wales, the €˜common framework€™ will facilitate an improved consensus at the 2004 Periodic Review,whist allowing sufficient flexibility for the integration of existing good practice.

A Project Steering Group, comprising four water companies (Severn-Trent, Thames,Southern and Three Valleys) and a representative from each of the Regulators,is providing guidance and support to the contractor. The UKWIR project manager is Richard Kirby of Anglian Water and client manager is David Hewitt, Three Valleys Water.
The forthcoming seminar will provide an opportunity for senior managers involved in Regulation, Capital Maintenance Planning and Asset Operations to debatethe proposals which will help to shape the direction of further work in this important area in the run up to AMP4.