Hi Water Quality and Security Followers,
This week we are beginning a new series on the Risk of Consent Failure of UK wastewater treatment plants. I think the topic of risk management as it pertains to new regulations is a cross-border issue and much can be learned from this series. Our guest blogger is Alan Bland, who is an independent consultant at AB-ility Consulting. Here is a quick bio:
“After taking early retirement from Northumbrian Water, Alan has worked as an independent consultant, carrying out projects for 4 UK water companies and Water UK, preparing an asset management plan for the water concession in Gibraltar (AquaGib), advising a large electricity generating company, providing regulatory support to a large environmental consultancy and publishing articles on water competition.
In the last three years (2008 2011) he has worked as an associate of SMC, carrying out reporting work (technical audit) on Draft and Final Business Plans for Yorkshire Water and Anglian Water, plus Annual Returns to Ofwat for Yorkshire Water in 2008 and
2010 and South West Water in 2011. In May 2009, Alan was part of a small SMC team that carried out a short project for WICS in Scotland. Also during 2008 – 2009, Alan spent 4 months working on a project in Saudi Arabia at the request of Suez
And now…on with the context:
In 1989, the 10 regional water authorities in England and Wales were privatised by being converted to public limited companies, which were floated on the London Stock Exchange. This meant their assets were sold from public ownership into private ownership, with the proceeds going to the UK Treasury. A less well-publicised change that occurred simultaneously was the creation of the National Rivers Authority (NRA), which inherited the water pollution prevention duties previously held by the water authorities. The NRA subsequently became the Environment Agency in 1995 by merging with HM Pollution Inspectorate, to create a powerful agency dealing with pollution on land, in the air and in the aquatic environment.
The previous water authorities had often been criticised for being “both poacher and gamekeeper” (similar to saying “both policeman and criminal”), which simply reflected the fact that wastewater treatment plant effluent consents were deliberately kept lax to avoid the need for investment in better treatment facilities. Moreover, many wastewater treatment plants failed even these lax consents but the water authorities declined to prosecute themselves. The basic reason for this was that the water authorities were only allowed to borrow for investment from the government and, since the UK government throughout the 1980s had progressively reduced the public sector borrowing requirement as part of its monetarist policies, this squeezed the capital investment programmes of the water authorities. A key reason for the UK government decision to privatise the water authorities was awareness of looming European Commission Directives that were about to change everything and force the water authorities to make massive investments in wastewater treatment. The government wanted this investment to come from private sources instead of the public purse.
So, in the early 1990s, the newly privatised water and sewerage companies had to work out how best to meet existing consents – and do so quickly before the NRA got round to prosecuting them. They also had to consider revised legislation, tightening up the UK compliance with the EC Bathing Water Directive, along with a string of new water-related EC Directives, most notably the Urban Waste Water Treatment Directive (UWWTD). At this time I was Business Planning Manager for one of the companies with particularly acute problems of this nature and I was tasked to help prioritise the investment. Following successful privatisation, there was no shortage of money for the investment but there was a concern over equipment shortages in the rush to up-grade wastewater plants across the UK, so there was a need to target the investment on those plants at the greatest risk of consent failure, such that the highest level of compliance could be achieved as quickly as possible. My job was to make that risk assessment.
In the next posting I will describe the nature of the consents and the interesting statistical problems they raised.