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The opening of the water market has “significant issues” that require “urgent attention” for it to be delivered, said a report for Ofwat as it overhauls the delivery plan for a third time.
Ofwat said it has revised the delivery structure in response to an independent review which gives the 2017 English non-household water market opening project an amber warning.
The report highlights the transition of the project leadership from Open Water Markets Limited (OWML) – the body initially charged with market opening – to Ofwat and Market Operator Services Limited (MOSL) as the primary concern.
The review states that “successful delivery will require a resolute focus by all parties on the key deliverables” and outlined “critical” and “essential” concerns.
The review panel, made up of Carillion Construction Services managing director, Adam Green, Guille Carlton Solutions director Jon Carlton, and the Scottish government’s deputy director Bob Irvine, said these concerns included the need for a “vibrant and shared vision of the path to successful delivery”, that escalation procedures within the programme are clear, and for a communications plan to be drawn up.
To address these concerns, Ofwat has “reconstituted” the working groups and the structure of the programme in an attempt to “formalise” the process. This includes transforming the planning group into the retail markets opening management group, which will oversee the entire project.
It has also created a communications group and a policy issues group, both of which Ofwat will lead, and a work plan review group, which will be led by MOSL.
An assurance group has also been created from the previous high level group, which will give advice to the secretary of state on the readiness for market opening.
Ofwat director of market opening Adam Cooper told Utility Week: “The idea of these groups is that they create an integrated programme view. We actually have a programme wide view rather than a view coming from the different delivery agencies.”
“It’s about formalising what we had before.”
Ofwat chief executive Cathryn Ross added: “The transition has taken a while and there have been one or two bumps along the way, but I think we’ve learned a lot, come out wiser and with the baseline review, we’re in a fantastic place to go forward.”
She also remained confident that the programme is “going really well and all remains on track” for the go-live date of April 2017.
The latest restructuring follows two previous radical overhauls of the market opening project.
The first happened in August last year when Ofwat announced it was winding down OWML after the Treasury refused to allow it to be classified as a private body.
The second overhaul occurred in February this year when the regulator had to abandon a scheme to appoint the Water Industry Commission for Scotland, led by Alan Sutherland, to oversee the programme, after it was voted down by the Scottish regulator’s board.
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