Drought, floods, leaks, meters

I wanted to wait to post this piece until the phenomenon I was going to talk about had actually happened (ironically tempting though it was to do a bit of ‘ambulance chasing’ on the flurry of stories we’ve seen over the past few months). Well, now things have more or less come full circle and I feel it’s as good a time as any to attempt this post.

Let’s start our story with a quote from a book published back in 2000, called Water For Urban Areas. In it Asit Biswas wrote the following:

‘Public, political, and media interest in water, which is extensive during catastrophic events, mostly evaporates after the floods and droughts are gone, and reappears only after several years or even decades, when the next catastrophe strikes…’ (p. 2)

The past few months have indeed seen exactly this kind of ‘extensive’ public, political and media interest in the UK’s drought and floods – with related questions being asked about current leakage and metering levels, among other things. But, reflecting upon what Biswas wrote over a decade ago, exactly where has all this interest led us?

The headlines have now started to recede, given the cessation of some drought conditions a few days ago, but let’s step back and re-trace the coverage over a six-month time window, for now. First we can go back to a December 2011 Defra press release mooting the possibility of summer 2012 drought orders in the face of two dry winters in a row. Fast forwarding a little, February 2012 brought a drought summit as the issue caught the media’s attention more and more, and we were treated to a fairly well-informed potted history of past ideas and plans for North-South water transfers - an issue upon which Boris Johnson has also piped in (back in June 2011; February was also when a ‘wacky’ plan from UU for a North-South pipeline alongside the HS2 rail line emerged). We also got a nice graphic of historical proposals for water region interconnections to address water resource imbalances, from way back in 1973:

Source: BBC news website (from the Water Resources Board).

This all came against a background where a summer 2012 drought was feared to be the worst since 1976 given low average winter rainfall levels not seen since 1972. Then, in mid-March, notice was given that seven water companies were going to impose drought orders from 5 April:

Source: BBC news website.

Regina Finn, chief exec of Ofwat, appeared on BBC’s Watchdog shortly afterwards (on 15 March) to respond to criticism of high leakage levels across the UK water companies in a time of drought. As people started to join the dots between droughts, leakage and metering in particular, April brought an interesting BBC story with a slightly broader set of apparently ‘radical’ solutions to the escalating water shortage:

• Spending billions on more reservoirs to increase water storage;
• Desalination to provide a new potable water supply;
• Recycling sewage to drink;
• Cutting per capita domestic water demand;
• Compulsory water metering and increasing prices to encourage resource conservation;
• Forcing companies to address more leakage;
• Building cross-country pipes to transfer resources from water-rich to water-poor regions; and
• Addressing population dynamics (limiting population or moving people to water-rich regions).

Throughout March and April drought-hit areas continued to spread just as heavy floods struck - with some rivers transformed from drought to flood in ‘one week’ – leaving many bemused (and confused) at the continuing drought orders:

Source: BBC news website (from EA maps).

Early May saw numerous attempts to explain how southern England’s long-term rainfall deficit (below) could not be immediately rectified by short-term heavy rainfall. Instead the message was continued low rainfall levels could mean drought until Christmas 2012 and even repeat restrictions again come summer 2013:

Source: BBC news website.

A week later (11 May) – following acknowledgement that we’d had the wettest (UK) April on record – it was announced that 19 areas had moved out of drought status. So will the media now read this as ‘crisis averted’ and shift their attention to other things? Will they leave the question of what has changed to prevent it all happening again unanswered?

Two days before the easing of drought conditions the Draft Water Bill was announced in the Queen’s Speech. Critics were quick to note its unambitious, slow timetable – and major omission of a strategy on metering to tackle future water shortages. A clearly disappointed Phil Burston – the RSPB’s water policy officer – even had this to say:

‘In terms of drought and flood, our legislators only look on the issue when it’s happening, and it goes off the boil between these events, so we stumble from one crisis to another.’

In other words, Biswas’ decade-old diagnosis all over again.

So, one has to ask, if months and months of high-profile water politics and media-led rumination on drought, flood, leakage and metering has achieved so little, what exactly is it going to take to break us out of this sorry scenario?

Duncan Thomas

WRc Open Innovation Day

Mark Smith, joint MD of WRc (Water Research Centre) saw the Soapbox I wrote for Utility Week back in February. He then kindly invited me to attend their Open Innovation Day, which was held last Wednesday at their Swindon HQ:

I’ve been looking at research and innovation issues for years, and have read WRc reports before, but this was my first site visit. For me WRc had always been a missing piece of the ‘puzzle’ in terms of my understanding of the overall UK water research landscape – one I’d never had the right opportunity to find out more about, and to see where it fit within the bigger picture.

Over 140 people attended – a good turnout and a sign of both the current elevated level of general interest in innovation and of the number of people working to develop and to promote technological and organisational change in various forms. The supply chain was well represented, a nice echo of our finding for UKWIR years back, of a high level of inventiveness in this part of the sector – and hardly surprising, I suppose, given these companies are driven by commercial objectives, and do have to innovate to survive (something it’s far harder to claim for the regional monopoly water companies themselves).

Steven Lambert attended the event to present the Technology Strategy Board (TSB) water security competition that Roger and I had just heavily criticised in a separate Utility Week feature. This made for an interesting discussion with him afterwards (!) but at the same time disappointment in the TSB platform was voiced during the Q&A after Steven’s presentation. I still think the platform is a victim of the TSB’s early pitching of the idea of a water platform (which I can remember as far back as our UWKIR barriers to innovation work in 2006) that raised hopes of a larger budget and broader scope. The platform may also be being pounced upon because of the ongoing, steady decline in UK water industry R&D since 2000:

People may have believed this new funding might reverse that dispiriting trend – perhaps unreasonably given the TSB’s limited remit, instruments and budget. Steven did however indicate that, depending on the level of interest shown in the TSB competition, there may be future TSB competition/platform funding on the same or other water-related themes (although he was unable to confirm this will happen, as he reiterated several times this is not his decision to make).

In addition to the presentations there was a short tour of the WRc’s site. I loved this! I always enjoy seeing the details of what’s going on. First up, we saw anaerobic digestion compliance testing apparatus (above); next a comparison of two potable water filtration media - recycled glass and sand (below):

I’d heard about using recycled glass some years ago, and was told it’s already in use at wastewater treatment sites, so this was a nice catch-up on the current state-of-play.

We then got a small ‘light show’ via a laser-based wastewater compliance testing rig (the measurement lasers were non-visible wavelengths so dry ice was used to highlight tracer beams, you may be able to make them out in the photo below):

After that it was out into the rain – ‘look at this drought’ jokes were in abundance (more on that in my next post!) – to see a pipe/pipe-joint stress testing rig and a rig for both ‘wet’ and ‘dry’ pipe testing, e.g. involving meters, leakage detection kit and other things (below):

Overall it was a very interesting, worthwhile day. I can’t say I agreed with the diagnosis that came out of the specific ‘funding for innovation’ workshop I attended, mind you. There was a view there is sufficient research activity in the sector and that the biggest problem is the rate of adoption of new ideas – which, for instance, discourages some investors, such as venture capitalists. Certainly uptake/implementation is a barrier. At the same time, as somebody did say, there aren’t yet solutions for some of the big issues facing the sector. I had imagined there would have been a stronger call for more funding for research to address sustainability and climate change-related challenges, in particular.

I’m very glad I attended though, and I’ll be following up on WRc research (particularly on household water demand, which I heard out about from WRc’s enthusiastic younger employees). I’m also happy the event was free. I get a fair number of event invites. It always surprises me the fees being charged for academic/NGO attendance of water conferences – let alone the commercial rates! So a thumbs up to WRc for not making cost a barrier to collaborative discussion of a very important topic on this occasion.

Duncan Thomas

Feature in Utility Week

A feature I wrote with Roger on the new Technology Strategy Board water security competition just came out in Friday’s Utility Week (20 April). It’s titled ‘Same old story’. Look out for it online (free) in a few days if you’re unable to get hold of the hardcopy magazine.

We’ve already had some positive feedback on our main points in the feature. In a nutshell we make the argument that the competition is very far from what’s actually needed to spur more innovation in the UK water sector. It has blurred aims, too many interests involved, a piecemeal approach to the projects it will fund, and a very small overall budget.

In the meantime, while we’ve been writing this feature, the UK news has been overloaded with drought and leakage stories. In a few days time we plan to do a round-up. Already though, we imagine the issues are going to quickly fade from the media’s attention – as they sadly always do with droughts and floods – and will have little lasting impact on the water sector…

Duncan Thomas

Water banker

On my return from drought-worried France at the end of last week I picked up a short comment in Saturday’s Independent [scroll to the bottom] entitled ‘Baggs bags half a million bonus as water bills rise’.

Apparently in France – where even bigger water bills rises are now expected than the 5.7% recently approved by Ofwat for England and Wales – Le Parisien has compared prices in various European countries and found the cost of clean water in the UK to be the highest. The figures in Euros per cubic metre are: UK, 3.79; Belgium, 3.51; France, 3.09; Spain, 2.11; and Italy, 0.88. (Does this question Ofwat’s assertion that it has driven down the cost for UK customers?)

The article goes onto suggest the UK’s high water price is needed to help pay Thames Water’s boss, Martin Baggs, a reported £500,000 bonus on top of his already £1.1 million salary. What is not mentioned is that this half-a-million bonus is not so large given that (the now retired) Philip Green of United Utilities took home annual bonuses in 2010 and 2011 of not far short of a million pounds!

(What these bonuses were for is a really interesting question. During his tenure Mr Green, rather than growing the company, basically sold off all the businesses acquired since privatisation, thus returning it to being a purely regulated water utility, similar in size and shape to the original ‘North West Water’ that was created way back in 1989!)

The amounts leaders of the UK’s regulated water businesses pay themselves is scandalous when you consider that – unlike banks and other corporations where big-bucks CEO salaries have become the norm – water leaders operate only pseudo-commercial, monopolistic businesses. The sooner the water industry gets back to being a ‘servant’ of the communities it serves, and Mr Baggs starts working on creating innovative solutions to tackle the South of England’s water shortages, the better.

Roger Ford

Liquid Assets: Atlanta, GA

My colleague Dale Whittington recently made me aware of the Liquid Assets outreach documentary on the state of American water and wastewater infrastructure. The film looks in detail at Atlanta, Boston, Herminie (Pennsylvania), Las Vegas, Los Angeles, Milwaukee, New York City, Philadelphia, Pittsburgh, and Washington, D.C. It’s very well produced (I wish someone would make a similar quality piece about the UK!). A 15-minute overview clip is available free to watch online. Do have a look.

Having now watched the full film I can do a little update on what Roger has jokingly referred to as my ‘holiday snaps’ post about my trip to Atlanta (the film covers the place). But first I’d like to offer some general thoughts about the film and what is conveys to me about some similarities and differences between the UK and US water sectors.

There’s a clear overlap in historical timing of major developments in water and sanitation infrastructure in both countries. Both had major late-19th and early-20th century investments in large brick sewers and interceptor sewers to move untreated waste streams away from the largest city centres. (The film mentions a book on eras of American water history, The Sanitary City by Martin Melosi, and I’m going to track it down…)

Both countries now have to fight to invest to maintain this legacy of antiquated assets so that they remain fit-for-purpose. For both countries, the scale of systems means this is a significant and perpetual, financial and management challenge. England and Wales’ privatised industry has asset management cycles. But across the USA’s more fragmented, public sector and municipal run system, approaches are varied. Additionally federal funding changed from grants to loans in the 1980s. This was apparently just before smaller cities – ironically those with smaller tax bases – had their decaying water and sewerage systems addressed. This left many places in the lurch – like the small town of Herminie shown in the film, which remained largely un-sewered and lacking sewage treatment for decades because costs were deemed to be too high to pass on to customers. (The UK of course is almost fully sewered, by comparison…)

I was struck by parallels between Manchester’s late-19th century aqueduct-provided clean water supply and New York’s so-called ‘Tunnel 1′ and ‘Tunnel 2′ drinking water supply. Both cities’ tunnel supply systems went many decades without even an inspection to check their condition. But whereas Manchester’s Thirlmere Aqueduct has been subject to annual shutdowns and maintenance since around 2005, for New York it won’t be until under-construction Tunnel 3 is finished that this will be fully possible. As discussed in the film, 1960s inspections of Tunnels 1 and 2 suggested that if their poor condition supply valves were closed for inspection they might never be able to be re-opened, leaving New York without a water supply! Tunnel 3′s construction is also a massive, multi-billion dollar project. It started way back in 1970 and still may not be finished until the end of this decade. (It was fascinating to note that New York’s water supply, according to the film, is unfiltered. I never suspected this would be the case.)

The film also covers Los Angeles’ unsatisfactory combined sewer overflows and how they affected bathing water quality – a problem shared by the UK, with its large number of similar combined storm water and sewage pipe systems. Most surprisingly to me the film also shows Las Vegas to be a major centre for water conservation – such that its unaccounted for water is apparently now under four percent. This compares to well over 20 percent average for the UK!

Coming back to Atlanta though, the story there focuses on Shirley Franklin. She was the self-styled ‘mayor of sewage’. During her 2002-2010 tenure she helped to improve Altanta’s sewage system. Back in the 1970s, Atlanta had been one of the first American cities taken to court by the US Environmental Protection Agency over its harmful municipal sewage discharges. In late-2002 Mayor Franklin announced a multi-billion dollar investment in new  sewerage, part of a new Clean Water Atlanta programme, to address the situation. Interestingly some of the money for this programme even came from a 1-percent Municipal Options Sales Tax - in other words, a source completely separate from water and sewage customer bills. It’s rare – but very satisfying – to see such a high-profile sewage programme, and one with a bold financing move like this involved.

The running theme of Liquid Assets is that the costs of providing fit-for-purpose water and sanitation infrastructure are large and never go away. You can’t install a system then not maintain it. You can’t install a system then never plan to upgrade or even expand it. And yet in the States – like in England and Wales before privatisation, and still to some extent in Scotland, Northern Ireland and Ireland – a significant backlog of under-investment has indeed built up. A representative of EPA puts it like this on the film’s website:

‘[In the USA we] have about 2 million miles of pipe … If you look at what we’re spending now and the investment requirements over the next twenty years, there’s a $540 billion difference.’

In the UK, even without such an investment deficit, tens of billions will be spent for decades to come on maintenance and enhancement works. And yet even that won’t mean the ageing condition of the whole sewer network is addressed for ‘about 800 years’ (according to an estimate in the recent Water White Paper [p.56]).

So, overall, Liquid Assets was a good reminder that on both sides of the Atlantic, water and sanitation is no cheap business!

Duncan Thomas

UK water London-centricity

Roger today picked up two interesting news stories about how London-centric the UK water business can be.

The first is a report in The Independent that Ofwat has been unable to find a suitable number of candidates to interview to replace current Chairman, Philip Fletcher, quoting a source suggesting it’s because ‘the best people’ for the job won’t work in Birmingham! Ofwat is now increasing the prospective salary for the three-day week job from £84,000 to £100,000 and removing the apparent requirement for the candidate to work in Birmingham.

I don’t know who the source is for The Independent’s story. But their take on Ofwat’s logic to locate in Birmingham in the first place is just pure London-centricity:

‘It was typically stupid public-sector thinking … [y]ou move loads of your staff to somewhere cheaper like Birmingham, then you can’t get the best people …’

To my understanding, Ofwat chose to locate in Birmingham because most of the water companies are not in London. I recall seeing material that Ofwat feels vindicated in its strategy, based on feedback from water companies. Against a policy backdrop that includes devolution and localism/Big Society aims, calls to concentrate even more power in London really rile me, especially as most of the stakeholders involved in this case are not even based there!

This brings me on to Roger’s second find – a plan reported in the Manchester Evening News to address water shortage in the South East of England by running a water pipe from United Utilities’ area in the North West down to London Euston, alongside the planned HS2 (High Speed Two) rail link!

UU has apparently been inspired by Chinese construction projects. Its plan would involve 200 miles of steel pipe at a cost of at least £2 billion, according to the MEN, and the idea is going to be presented to the Environment Food and Rural Affairs Select Committee next month.

This type of cost figure was missing from the all-party water group meeting I spoke at last week. There MPs asked about a ’national grid’ for water. Figures were unavailable from the speakers but if £2 billion had been mentioned as the minimum cost – for just one part of it – I’m pretty sure some eyebrows would have been raised!

The MEN also quotes UU’s chief financial officer Russ Houlden on the soundness of the overall idea:

‘Wacky? Maybe but the Victorians had bold ideas when they built our aqueducts …’

I’ve been teaching recently, so I happen to have at my fingertips the original cost of UU’s late-19th century Thirlmere Aqueduct, which some bold Victorians did indeed build. It cost £3-4 million at the time. That’s £180-240 million in current money, not £2 billion. Unsurprisingly the MEN story closes by saying:

‘Details of how the pipeline would be funded and whether any of the cost would be passed onto customers have not been discussed at this stage.’

Well, given the figures, quite!

Now, UU’s Russ Houlden is right in that HS2 provides ‘a once in a lifetime opportunity for joined-up working to minimise planning difficulties and environmental impact’ by laying the pipe in parallel. He may also be right when he says the pipe ‘would only be used as an insurance policy in times of water shortage and so operational costs should be negligible’ – although I imagine in reality that once’s it’s in and available for use we might find ever increasing demand for water from it, given current and projected future North-South water resource imbalances.

Water bills are already going up. Most scenarios I’ve seen suggest they’ll continue to for some time. Things like the £3.5 billion Thames Tideway Project are in the pipeline. Given all this, are water customers really going to want to pay to fund a ‘wacky’ project like this?

Duncan Thomas

All-party water group meeting

Last week I was down in London, in a committee room of the House of Commons, on the panel for an All Party Parliamentary Water Group meeting. The agenda was to discuss the second half of the new Water White Paper.

My fellow panel speakers were Tony Smith, Chief Executive of CC Water, Andy Pymer, Head of Policy and Regulation at Wessex Water and Andrew Beaver, Director of Strategy at Ofwat. The meeting was chaired by Anne McIntosh MP:

APPWG meeting last week. Photo: Sopphie Wedderkopp

The theme was a ‘customer focused industry’, covering regulatory reform, competition, metering and affordability – including the £50 subsidy for each household in the South West of England as set out in the White Paper.

Tony Smith suggested there was much to like for both domestic and business customers in the White Paper. He said research with water customers had shown a one-size-fits-all approach to metering wasn’t the best way forward, echoing the White Paper’s non-compulsory stance on metering. He then highlighted that customer satisfaction and perceived value for money are still not key performance indicators for the water industry.

Andy Pymer’s stance was that the Government should do more on metering to save water in the face of drought, such as making metering something you would opt-out of, rather than opt-in. He said Wessex Water’s recent water metering trials had resulted in 15 percent water use reductions and that it was important to target meter installation around key life stages, like when people move house. (Andy’s comments were put out in a Utility Week story shortly after the meeting; he’s also kindly just sent some background materials too.)

Andrew Beaver was happy the new White Paper coincided with Ofwat’s extensive Future Price Limits consultation, now just closed. Some key messages are reinforced by this overlap, such as a welcome focus on the customer. (There’s an awful lot in Ofwat’s consultation material and how it links to the White Paper. I’m going to save that for a future post!)

Alan Sutherland, Chief Exec of the Water Industry Commission for Scotland was in the audience. Alan explained how large water use customers in Scotland wanted more attentive service, and that they made this possible by allowing a wider, competitive range of service providers to come in to address customer preferences for better prices, being greener and so forth. The White Paper suggests learning from this Scottish example to increase water competition in England and Wales. (There was also some general discussion about having a ‘national grid’ for water, given the announcement the day before the meeting that the South East of England is now officially in a state of drought. I felt the pros and cons – and it’s mainly cons from my point of view – of a ‘grid’ sadly weren’t given a proper airing at this meeting though…)

For my part, I spoke about how innovation was going to be needed across the board to tackle the regulatory reform, competition, metering and affordability aspects of the new White Paper – as well as other long-standing, known challenges like rising energy use and carbon footprint, rising water bills and rising customer and industry debt levels. I noted that, whilst the White Paper gives quite a high profile to ‘innovation’, it probably underestimates how difficult and long-term it can be in the water sector. (Things may be getting worse now too, as many ‘innovation champions’ that have been around since before privatisation have retired from the water companies.)

Photo: Sophie Wedderkopp

I mentioned there were some good ‘hooks’ in the White Paper that inventive suppliers might use as a rallying call for change. I also suggested the sector still doesn’t seem to know what it wants to be. It just goes on spending vast amounts of money across a rather ill-defined – and unforeseen at privatisation – mix of major environmental enhancements of national significance, daily utility services, and maintenance of antiquated assets (distinctions first drawn by Dieter Helm some years ago; Ofwat’s recent deliberative research also has more about how the purpose and value of the water sector are currently understood by customers… I plan to follow up on it).

Overall, it was an interesting meeting. And yet it did feel like deja vu. I was last in front of the APPWG in 2008. It’s good to see that since then some of our UKWIR barriers to innovation recommendations are starting to be acted upon. There is now a multi-stakeholder platform to develop a shared vision for innovation. There is an innovation platform for water - on ‘water security’, details of which have finally been published by the Technology Strategy Board.

Nevertheless I felt I was making many of the same points over again – albeit to (some) new faces. I guess we have moved on from having discussion groups on reform, to making actual plans for reform. And these are plans that should soon become binding legislation. I just hope that when they finally do they will make a difference.

Duncan Thomas

Soapbox for Utility Week

I was recently asked to write a short Soapbox for Utility Week. It went out in the 3 February print edition and it’s now freely available online for you to read here. It was fun to attempt to write a short, punchy article. Thanks again to Roger for his helpful comments on it.

While you’re at Utility Week you may also want to have a look at the earlier Soapbox article by Martin Cave. He also talks about the recent new Water White Paper, and what it does and doesn’t take up from his March 2008 to April 2009, Cave Review.

Duncan Thomas

Wonderful World (of Coke)?

It’s taken me a while to get around to posting this one up. Part of the reason has been a certain unease about the topic. Beyond that I’ve been a bit rushed off by feet with a whole raft of dry-runs for our upcoming performance monitoring – the Research Excellence Framework - and have been trying to get a hold of all the relevant photos…

No matter. Last September I went to the States, Atlanta, Georgia, for a conference at Georgia Tech. It was exciting, being my first trip Stateside, and I even badgered a colleague into photographing the taxi trip from the airport, as I sat overawed by the looming skyscrapers and multi-lane freeway:

Photo: Maria Nedeva

I settled very quickly into the long, mid-30s days of predictable blue skies, but unwittingly got sunburnt…

Photo: Maria Nedeva

The TV news was totally hectic. 15-20 minutes could pass after getting out of the shower in the morning before I realised I was hypnotised by a combination of HD presentation, stupendously bright lights and garish colours, excesses of makeup and oversized hair-does. To this day I’ve never seen more enthusiastic reporting of rush-hour traffic, complete with 3D graphics:

My first goal was to sample as much ‘American’ food as I could. I got off to a great start by trying a donut-burger (a donut in place of the bun) at Cypress Street Pint & Plate. I also wanted to try diner food, but failed. The closest I got was a handful of dollar-burgers at the nearby drive-in, Checkers:

Photos: Maria Nedeva; also pictured, Adbullah Gok

Despite being only two or three blocks direct walk from an international academic conference centre/hotel, the staff at this Checkers had never heard a British accent (let alone the Turkish and Bulgarian ones of my colleagues!). That was a nice moment but made me realise few international visitors seemingly stray far from the immediate surroundings of their particular event.

I also got to see the lovely Piedmont Park, the Federal Reserve Bank of Atlanta (from outside), the home of Gone with the Wind author, Margaret Mitchell (from a distance), some wonderful buildings (new and old), and much of the very impressive Georgia Tech campus including their range of sumptuous GT-branded apparel:

Photo: Maria Nedeva

After learning Atlanta was also the home of Coke and its quasi-museum/propaganda-powerhouse, the World of Coca-Cola I was rather conflicted. I dislike most of Coke’s drinks (and, boy, are there a lot of them, as I found out in the place’s tasting room!). I’ve also heard about Coke’s apparent water-related practices around the world (you can get a rough idea of what I mean from this academic article, this website, this piece in the Ecologist, this local Indian news story, this collection of concerns, and this blog post).

Getting there was an experience. It didn’t look far on the map so a colleague and I decided to walk. We passed a group of arguing homeless people then headed into this deserted, rubble-strewn underpass:

Pictured, Andrew James

Not exactly a place designed for walking. Once there, the World of Coke provided an immediate assault on my senses. The colour red, predictably, was everywhere:

Source: World of Coca-Cola website

The atmosphere was odd, given my attitudes to Coke. Our host’s opener, clearly intended to rouse and rally the group of visitors who had come from around the States and around the world, was ‘The one thing that unites us is our love of Coke!‘ I felt truly out of place at that point! I also found the ambiguous juxtaposition of ‘facts’ and marketing very disconcerting (I can imagine lots of ‘disclaimer’ plaques if the place was in the UK).

My colleague and I were able to pick up some interesting titbits. First, unbeknownst to me, Coke operates as a franchise of somewhat independent bottling/carbonated water operations that get supplied with the concentrated syrup(s). This may complicate tackling any apparently dubious water-related practices of overseas bottling/water operations. Second, Coke was operating in Germany during World War II – according to an archive photo of a delivery truck we saw. I’d like to know more about this. Third, after sitting through a surreal ‘Happyfication’ film, and being subjected to a ‘history’ of Coke’s advertising, I wondered just how far a company can take its claims for what its brand has supposedly achieved (increased world unity, and being at the leading edge of various social movements during the 20th century seemingly being among Coke’s current claims).

There were various other insights about technology and design patents, and a fascinating exhibit on the 1985 introduction of New Coke and the subsequent customer backlash. The best part of this was a marketing strategy document that likened the launch of New Coke to a WWII allied campaign. Mind-blowing in both inappropriateness and excess, truly.

We wrapped-up our visit with probably the strangest souvenir photo I currently have in my collection:

Also pictured, Andrew James (NB: unintended comic position of bear's hand)

A few days later we were ready to return to the UK. I had another novel and unsettling experience, of seeing lots and lots of US troops ready to be shipped off for service in the Middle East, as we waited for our return flight:

Photo: Evgeny Klochikhin

This brought home the human reality of the Iraq and Afghanistan military actions for me in a way that years of news coverage had completely failed to. It also topped off a very diverse first-ever trip to the States that was intriguing and disorientating in equal measure…

Duncan Thomas

New Water White Paper

Before the year draws to a close here are some of my initial impressions of the new Water White Paper that came out earlier this month, back on 8 December.

It opens with two irksome boasts: first, that the UK water privatisation is a ‘success story’; and second that £90 billion has been spent since 1989. A neutral tone about the reality of the post-privatisation performance of the England and Wales water companies would be more appropriate in a piece of policy. It’s also rather crass to keep going on about how much money has been spent by ‘the industry’. These investments have been funded by higher customer bills and taking on staggering levels of debt for future generations to worry about, after all. These are not exactly things to be proud of in the current global economic climate!

Beyond this rather shaky start though, there’s much interesting material in the White Paper. It covers a lot of ground. There’s a whole new approach to abstraction. There’s limited movement on competition. Sustainability and integrated planning are emphasised. Time will tell how much finally gets picked up in legislation and regulation. But there are at least things that could lead to some interesting changes…

I’ve grouped my initial thoughts as the ‘good’, the ‘bad’, and ‘undecided’:

The Good

• It’s good that the resource-intensive Cave, Walker and Gray independent reviews have not been left hanging by the Coalition, and have been taken up in the White Paper
• Current pressures on water resources and harm from over-abstraction are prominently noted
• It’s highlighted that future likely increases in water stress due to climate change will not just be limited to the South East of England (an increasingly common myth)
• There’s a call in the Paper ‘to innovate and develop expertise’, specifically on leakage and water efficient technologies/treatment, even though the driver is noted as the ‘global water market’ – a nebulous concept, as market fragmentation and political uncertainties mean it doesn’t really exist!
• It’s recognised that ‘new technology and new ways of working’ are needed – another boon for innovation champions in the sector
• A £3.5 million water competition fund via the Technology Strategy Board is announced, to launch in March 2012
• Affordability measures are dealt with
• The Government don’t plan to compensate abstractors for losses during transition to a new abstraction regime, as the changes are motivated by a need to protect better the environment – a bold stance
• A partial (local) ‘water national grid’ is discussed, and its carbon implications are raised (Roger would remind me though, that cross-border water sharing is nothing new, and happened pre-privatisation)
• Integrated planning is stressed – to encompass the differing timescales and objectives of RBMPs, WRMPs, drought plans, and the Price Reviews – and longer term guidance will be provided to Ofwat and the water companies
• There’s a commitment to take forward promotion of anaerobic digestion (AD) – albeit after a pending EC report on the Sewage Sludge Directive

The Bad

• The Paper talks about increasing the innovativeness of the sector and yet stresses it should low-risk for investors – a contradiction in terms?
• There’s no mention that the sector got locked into an unsustainable capital, energy and debt-intensive paradigm after privatisation
• The impacts on the supply chain of cyclical investment patterns are not highlighted – even though they were mentioned by the recent Gray Review (and have been the subject of research by UKWIR and others)
• Apparently the new proposed abstraction regime will only be in place by the mid- to late-2020s – this is too slow and subject to too much political risk
• The metering approach is very weak, and there’s no universal adoption goal
• The Paper is also weak on customer bad debt, although the Walker Review stressed it was over £1 billion in 2008/09 – three times higher than bad debt in the UK’s electricity and gas sectors combined!

Undecided

• There’s going to be a Government-funded rebate for South West Water‘s customers (as their network was apparently worst off at privatisation, and has needed disproportionate investment funded by higher than average bills). Shouldn’t there be some qualifying test first? Shouldn’t this rebate be wholly or partly funded by SWW if its investments since privatisation were not as efficient as the sector’s benchmark leaders?
• For competition there will be no retail and distribution business separation. There’s still a certain pandering to ‘investor confidence’. The Paper recommends an ‘evolutionary’ approach even though approaching competition this way has achieved practically nothing since privatisation
• The large user supplier-switching eligibility threshold will drop from 50 megalitres to 5Ml, putting 10 times more business customers into the ‘market’ (26,000 instead of 2,200). The threshold will eventually drop to zero – via an as yet non-timetabled ‘future Water Bill’ – but domestic customers still look unlikely to ever be able to switch water suppliers
• There’s a desire to learn from the Scottish competition approach but the timetable is key – when will it happen? There has been too much procrastination, e.g. the years wasted whilst Ofwat split hairs over whether it should ‘promote’ or ‘facilitate’ competition
• The Government might make sustainable development a primary duty for Ofwat, as the range of ‘challenges the sector faces‘ it says make a ‘strong argument‘ that ‘sustainable development must be central to everything that Ofwat does‘ (p.97) – this might be good if it happens… but will it?

With these first few thoughts we’ll close by both wishing you a very Happy New Year. Here’s hoping some of the positive ideas in this new Water White Paper will mean it’ll be more a promising, innovative and sustainable year ahead for the UK’s water sector!

Duncan Thomas