A leading water sector expert is warning that it will be “a real challenge” for the water companies to create a systems based approach from scratch in time for business plan submissions in September 2018, following the publication of Ofwat’s report on resilience yesterday.
Richard Khaldi, water sector expert at PA Consulting Group and previously Executive Board member and senior director at Ofwat, said that the report asks companies to be ambitious and thorough in building and demonstrating their approaches to resilience. It also reconfirms the PR19 consultation methodology’s requirements for water companies to focus on corporate, financial and operational resilience.
However, anyone looking for further detailed guidance on how companies should tackle resilience and articulate it in their PR19 plans would be disappointed. Ofwat highlights approaches and best practice from other sectors and makes suggestions, but does not give water companies much more, he added.
In the report, the regulator suggests a systems thinking based approach to enable them to see the bigger picture and advocates extensive customer engagement.
In Khaldi’s view, it will be a real challenge to create an all-encompassing systems based approach from scratch, along with a suitable level of customer engagement, in time for business plan submissions in September 2018.
“That task is made harder because most water companies will have traditionally focused on asset and catchment resilience and not resilience in the round, which Ofwat’s report suggests should cover cyber security threats, supply chain risks, workforce challenges and formal business continuity management systems.”
“We will have to wait and see how Ofwat benchmarks water companies’ performance on both assessing and planning enhancements to their resilience in the round. The report it has issued today makes it clear that it is a long term goal, both for PR19 and beyond and that it wants assessing and measuring water company resilience to be an ongoing obligation.”
He added that how much Ofwat will allow companies to grow and mature their approaches over time is unclear.
“The hope must be that it will find the right balance in allowing companies to start well through the PR19 process and demonstrate a long term commitment to mature their resilience approaches, and not judge the next 20 years just by what they do in the coming 12 months.”
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