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Infra UK chief: water firms should manage their supply chains better

The chief executive of Infrastructure UK has called on water companies to “manage their supply chains better”.

Geoffrey Spence also told CN that the boom and bust investment approach in the sector – which sees workforce upheaval and huge costs – could lead to supply chain members leaving the industry.

A study by IUK, Ofwat and industry members saw a number of recommendations launched yesterday, including a rolling 12-18 month work and investment pipeline.

Mr Spence said it is in ‘everyone’s interests’ to improve the investment process.

He added: “It’s very important that water companies themselves manage their own supply chains better.”

IUK fears that “quite a few companies might look to exclude the sector as a result of the AMP process and cyclicality”.

“Clearly the more uncertainty there is in that turnover, the more difficult it is to stay in that sector,” said Mr Spence.

He added that part of this is about the government trying to bring industry regulators together to act in such a way that economic growth is not prohibited through ‘inefficient investment practices’.

“The supply chain should expect to see more forward visibility of the pipeline… some good companies do that already but we are keen to get everyone up to the same standards.  That links into our broader Infrastructure Cost Review message.”

He added:  “You have in the water industry one year between initial determination and final determination.  One of the interesting things is how little change there is in an investment programme during that period.”

The IUK chief said this is one strand of the bigger challenge of reducing the cost of UK infrastructure, with implications for other regulated sectors. Mr Spence said:  “We are moving on to that now.  (Probably) it will be more in the transport space; with the DfT and Highways Agency and Network Rail in our sights.”

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