This item was published during the term of a previous administration that ended in April 2007
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Report on Scottish Water
20/04/2004
A report on Scottish Water's investment programme and asset management was published today.
Deputy Environment Minister Allan Wilson commented that Scotland's water industry is improving but we must keep up the momentum of development.
The main findings of the report show that Scotland's drinking water quality is continuing to improve, nearly all Scottish Water's work on secondary sewage treatment has been completed and there are encouraging signs that the Company is continuing to improve its asset management processes.
The report by the Water Industry Commissioner (WIC) is on investment in the water industry in Scotland in the first year of Scottish Water's existence 2002-03.
In his report the WIC identifies some concerns about the Company's delivery of its investment programme.
This is the second such report made by the WIC's office, the first being an assessment of the final year of the three previous water authorities. It compares a number of aspects of investment, asset condition and performance with those of the water companies in England and Wales.
Allan Wilson said:
"The Executive established Scottish Water to bring significant improvements to the quality and efficiency of Scotland's water supply industry.
"I welcome this report on the Company's first year of operation. I am pleased to see that drinking water quality is continuing to improve and real benefits to the environment are being delivered.
"However, it is clear that Scottish Water still faces considerable challenges to deliver the remainder of the £1.8 billion investment programme over the next 2 years.
"I recognise the delay in the capital programme has been as a result of the setting up of more efficient delivery mechanisms.
"I am encouraged that since Scottish Water Solutions Ltd was set up a number of major projects have begun throughout the country. When completed they will bring much needed environmental and drinking water improvements and at substantially better value for money.
"I will continue to monitor Scottish Water's performance on this issue very closely and expect to them to speed up the efficient delivery of this vital programme of work which reverses the trend of decades of under-investment in our water infrastructure."
This is the second annual Investment and Asset Management Report produced by the Water Industry Commissioner's office. The first dealt with the final year of the East, North and West of Scotland Water Authorities, and this is therefore the first such report on Scottish Water, concentrating on the financial year 2002-03 and covers the first year of the current investment programme, Quality and Standards II.
Financed by the Executive but paid for by customers out of charges, Quality and Standards II is the biggest ever water investment programme in Scotland. A total of £1.8 billion will be invested to improve the quality of drinking water for the people of Scotland and clean up Scotland's coastal waters and rivers. Between now and 2006, this includes the commissioning of more than 1500 individual projects across Scotland which will responsible for up to 50% of the civil engineering work in Scotland.
Scottish Water is working hard to improve the efficiency of their organisation to secure benefits for the customer. In response to the significant investment challenges set by the Water Industry Commissioner (i.e. to deliver £2.3bn of capital projects for £1.8bn), Scottish Water established an asset delivery partnership with the private sector called Scottish Water Solutions Ltd to secure more efficient delivery of its capital investment. This is an innovative partnership with 2 private sector consortia. The two consortia partners are Stirling Water - comprising Thames Water, Kellogg Brown & Root, Alfred McAlpine, and MJ Gleeson; and UUGM - comprising United Utilities, Galliford Try and Morgan Est.
Scottish Water Solutions Ltd are managing a number of major projects throughout Scotland. Examples include:
- Philipshill waste water treatment works, South Lanarkshire - £6m
- Greenock/Gourock/Port Glasgow - Inverclyde - £2m
- Lochaber water treatment works at Salen/Drimnin/Achargill - Highland - £4.4m
- Lochgilphead waste water treatment works- Argyll & Bute - £8m
- Katrine Water Project - West Dunbartonshire - £100m
The WIC report reveals that there has been a slow down in the delivery of Scottish Water's investment programme. This is mainly due to the process of forming the new joint venture company. Scottish Water took the view that it was better for customers to accept slight delays in the delivery of investment while Scottish Water Solutions was being set up, than compromise on progress towards benchmark efficiency. In his report the WIC accepts that this delay was in the customers interest but looks forward to Scottish Water accelerating the delivery of its capital programme.
The report by the WIC can be found at www.watercommissioner.co.uk