Project Appreciation and Objectives
Stage A of the Capital Maintenance Planning Common Framework (CMPCF) requires companies to calculate trends in levels of both expenditure and serviceability/asset performance measures. This is essential if historical expenditure is to be linked with accrued customer service benefits. Attention in previous Price Reviews was focussed on proposed changes to historical levels of expenditure and justifying any change. However, the wider question of whether the historical level of expenditure was itself efficient needs to be addressed, particularly as Ofwat is looking to companies to provide customer supported levels of serviceability and demonstrate efficient spend across their entire business plan. This is a challenge since sufficient, good quality data to support the Stage A assessment are not always available.
The project objective is to promote and illustrate good practice in demonstrating the customer service benefits of capital maintenance expenditure. Particular focus will be given to approaches which produce a credible business plan where historical data are limited. WRc will illustrate good practice by collecting information on a sample of historical capital schemes, associated serviceability measures and more detailed performance indicators, across each of the four Ofwat sub-service categories.
Business Benefit to Clients
- Confidence that the demonstration of efficient spend in their business plan is in line with Ofwat's expectations.
- Hold a Project Initiation Workshop to establish project priorities. These priorities will set the scope for compilation of the evidence base and define the data requirement. Ofwat have indicated that they will participate in the workshop.
- Conduct site visits and complete data collection. WRc will visit each participating company to investigate current and past approaches used to demonstrate efficient spend in the priority areas. The evidence base requires data input from participating companies, the site visits will facilitate data collection.
- Compile individual company reports containing information gathered during site visits and customised recommendations for focus areas. Compile a good practice report illustrated with evidence base examples.
Project Output and Implementation
- A Good Practice Guide for demonstrating efficient capital maintenance expenditure aimed at providing practical guidance to investment planners / asset strategy teams, supported by:
- Individual company reports identifying areas which require further investigation together with recommended approaches for PR14.
- Individual company WebEx sessions to disseminate outputs and accelerate routes to implementation.
Related WRc Work
- CP419 Improving AMA through Data Quality.
- CP399 Integrated Distribution Management: A common Approach to Risk.
- CP434 SIM: Understanding the Impact of Interventions.