The UK water industry is forecast to make record investments in capital equipment, infrastructure and operational activities over the next five years, according to a report published today by IMS Business Information Services.
During the period April 2010 to March 2015, water companies in England and Wales have committed to a £22.1bn capital expenditure, with a further £2.5bn scheduled to be spent in Scotland and £564m in Northern Ireland during the same period.
The industry’s next investment cycle, AMP5, will provide some tough challenges for water companies, who are obliged to invest at agreed levels in a range of improvements to water treatment and supply. At the same time, the amount they can charge the customer is strictly regulated by OFWAT, the industry’s watchdog.
"What this level of investment means is that suppliers into the sector, the manufacturers of the equipment needed to maintain the water and sewerage infrastructure in the UK,could be in for a profitable few years" explains Elaine Coles, the report’s author.
While the water companies may be unhappy about OFWAT’s pricing policy, to those businesses that supply goods and services to the water industry AMP5 should provide excellent opportunities for growth. Significantly, many companies that could be benefiting from the investment are failing to capitalise on the market opportunities that exist, according to the report: Selling into the UK Water and Wastewater Treatment Industry 2010- Key Drivers and Opportunities. Although all water companies have to make detailed plans about their investment and procurement public, many suppliers simply don’t know how to approach the market or fail to understand the tendering systems in sufficient detail.
"Despite the current economic conditions, the UK water and wastewater sector has one of the country’s most significant investment programmes firmly in place. Manufacturers and consulting engineers could and should be making more of the opportunities presented to them." said Ms Coles
The 530 page report Selling into the UK Water and Wastewater Treatment Industry 2010- Key Drivers and Opportunities is available as hard copy or electronically for £795 from www.waterbriefing.org
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