Sizing Up the AMP6 Challenge
The drive for greater cost-efficiency under AMP6 and Totex is likely to favour suppliers with broad shoulders, writes Michael Miles, Managing Director of Technocover, a leading provider of LPCB third party approved security equipment for the hardening of water infrastructure.
|Security suppliers need to be equipped for the physically bigger challenge of asset hardening in AMP6|
So AMP 6 is finally underway. OFWAT’s expectations are clear: the emphasis is on Totex- and innovation-driven cost-efficiencies aimed at improving customer service without hiking price. As always, it means new challenges for the water companies and their Tier 1 and 2 contractors.
With a shift under Totex from ‘outputs’ to ‘outcomes’, consideration of capital expenditure and operational cost are now inextricably linked. The benefit, of course, is visibility of the life cycle cost impacts of procurement decisions. It will facilitate improved cost control, greater innovation, and maximise opportunities to identify and deliver those much sought cost-efficiencies.
Success with Totex will rely on the ever-greater application of ‘joined-up thinking’.
Evaluating the life cycle cost of equipment – whether for a capital project or call-off within a framework - involves an exhaustive ‘matrix’ of considerations. It needs to take account of risk assessment, design, value engineering opportunities, logistics, installation, operational efficiency, maintenance, decommissioning, and many things in between.
These can only be properly identified and addressed with cost optimisation in mind through early consultation with the supplier. The best outcomes are likely to be achieved with providers whose shoulders are broad and flexible enough to deliver, coordinate and cost rationalise as many aspects of the ‘matrix’ as possible.
This is no less important in the implementation of physical security - access covers, doors, cages, kiosks, modular buildings - for access protection and asset hardening.
LPCB certification at the required security level will be the first criterion in their selection for many applications. But like any other ancillary component, life-cycle cost and performance is defined by much more.
For example, additional site work may be needed to reinforce the existing building fabric surrounding a new security door, or to strengthen concrete formwork for an access system. Otherwise, structural integrity may be compromised and the installed component may not perform as expected. Full service suppliers, offering survey, design, manufacture and installation, will identify and resolve these potential hidden costs and risks as part of the solutions they offer.
Broad shoulders will be all the more vital in AMP 6 as water assets requiring protection get larger.
Technocover has been responding to this trend since the middle of AMP 5, undertaking gate systems as large as 4m by 7m high and walk-in kiosks with footprints up to 10m by 6m. And the challenges are only going to get bigger.
We are completing some £1.1m investment in production and delivery fleet in order to value engineer and implement these super-size systems as cost-effectively as possible.
The drive for cost-efficiency in AMP 6 and hand-down of project management to Tier 1 contractors is likely to see a rise in offsite construction.
Increasingly, Technocover is consulting with water clients on factory assembled ‘plug and go’ kiosks with fully fitted M&E services. These can usually be craned into position for simple connection to mains services, saving site labour and programme time. Importantly, it transfers the management and certification of complex fit-outs to the quality-controlled environment of the factory.
As Tier 1 contractors take on more responsibility for programme delivery, they are also exposed to greater risk, especially on bigger security upgrades. Suppliers with the product range, logistical resources and manufacturing infrastructure to efficiently and comprehensively service these major programmes can help alleviate the risk burden.
The desire to transfer more elements of project delivery to the supply chain is already being seen in framework tenders. For instance, water companies are looking for greater logistical support from suppliers, such as product warehousing and call-off, to reduce the onus of equipment storage and movement to site.
Equally, in the forthcoming adoption of private pumping stations, water companies will be looking for cost-saving retrofit solutions in bringing them to a safe and serviceable standard. Again, early involvement with suppliers can help optimise the cost of essential upgrades to access covers, where these are necessary.
In the new era of Totex accounting, equipment longevity should not be overlooked. While LPCB certification will assure the required level of physical security, will the product finish assure the required service life?
For example, a high quality post-galvanised coating will be essential on steel security doors to a gas or chemical store. Anything less will not adequately protect them against the corrosive effects of the environment.
As the name suggests, total service specialists like Technocover are amply equipped for Totex, and more than ready to help the industry to new levels of cost-efficiency and service resilience.
For further information telephone 01938 555511 or E-mail: firstname.lastname@example.org
This article was published online by Water and Wastewater Treatment – http://wwtonline.edie.net/topics/amp-cycle. Reproduced here with the permission of the publisher.