Water chiefs warn Lords over aging infrastructure

The slow rate of replacement of aging infrastructure has been highlighted to a House of Lords select committee by the chief executives of three water companies.

The heads of Thames, Southern and Welsh Water warned the Industry and Regulators Committee that although much of the recent focus has been on river health and wastewater treatment, other parts of water networks also require urgent attention.

Balancing the need to invest in underground supply infrastructure, much of which was built during the Victorian era, with affordability concerns must be addressed in the upcoming price review, Lawrence Gosden, chief executive of Southern Water told the committee.

“We are soon reaching a point we must start ramping up the replacement of cast iron mains with plastic mains that will be fit for the future,” Gosden said. He explained that investment is urgently needed, not only to address combined sewer overflows, but also other parts of company’s supply and waste networks.

“Mains replacement is a really important investment need that we now need to face into even stronger,” he added.

The new head of Southern Water appeared alongside Sarah Bentley from Thames and Peter Perry from Welsh Water as part of the committee’s inquiry into the work of Ofwat.

Bentley set out replacement requirements in London to improve leakage reduction. She told the inquiry Thames repaired leaks on average once every 10 minutes on pipes that are an average age of 84 years old in the capital and 70 years old in the wider Thames Valley area. She said the age of mains pipes is up to 150 years old while the replacement rate for Thames sits at 0.5%.

She said: “We need to get input rates right to make sure we are replacing our pipework in a way that keeps asset health up to date. That will take a sustained uptick in investment.”

That sustained investment, Benson advised, should be spread over multiple investment cycles to keep down bills. She told the committee that asset health replacement rates are currently at a lower scale than required, particularly when considering demands created by climate change and the need to protect water sources.

Asked about competitive financing models, Bentley along with Perry and Gosden advocated for more use of the Thames Tideway model for major infrastructure projects where the asset is funded, built and operated by a third party.

She advised that remote assets such as reservoirs are ideal candidates for such a model but that pipework, which is tightly integrated with companies’ controls and networks would not be suitable.

Perry stressed that in Wales, a heavy focus on combined sewer overflows would bring “a perverse outcome” for rivers in Wales, where nutrients cause more problems and require attention.

He assured the committee that water companies are indeed incentivised to help householders consume less water because energy and chemical costs mean producing less water results in significant savings rather than boosting revenues.

He added that government should take an active role in spreading demand management messaging as it previously has on energy. Helping customers use less water would require work by the sector as well as its regulators and government to be impactful, Perry added.

Lord Sharkey noted that government has not shown interest in supporting public messaging recently “but they may of course change their minds on that”.

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