Water Services Training Group
16th Annual Conference
Water Sector Reform
Programme
Implementation
INEC, Killarney, 8th November 2012
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Water Sector Reform
Programme Implementation
Irish Water
Implementation Plan
John Barry
Irish Water – Programme Director
Bord Gais Eireann
Irish Water
Bord Gáis Éireann
Board
Bord Gáis Éireann
Group
Bord Gáis
Energy
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Bord Gáis
Networks/
Gaslink
Irish Water
Independent subsidiary within Bord Gáis Eireann
Interim Legislation in 2012 – allow for roll-out of metering
programme and preparatory work.
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Irish Water – some challenges.
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Create the utility with appropriate Corporate Governance , Policies and
Procedures;
Create and build the Brand Irish Water;
Build capability to issue c.1.4m bills in 2014
Procure , manage and deliver the metering programme;
Develop and agree SLA arrangements with the sector;
Carry out the fact finding with Local Authorities through the Transition
office;
Develop the enduring funding model;
Negotiate the first Regulatory Contract.
Install , test and go live with suite of systems to support the above including
customer support infrastructure;
Take responsibility of the Capital Programme;
Blueprint for Irish Water
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As part of the 12 week mobilisation phase that •
commenced in April 2012, Bord Gáis has developed a
blueprint for the Irish Water organisation. This
blueprint will form the foundation for the detailed
design of the Irish Water organisation including
detailed business process design, detailed organisation
design and detailed systems design.
The Irish Water organisation will be established via a
phased approach with key milestones to develop and
transition the Operating Model, Organisation Structure
and Systems Landscape to the end state.
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Three important dimensions of the
Operating Model that have been
designed to date are:
1. Functional Operating Model
2. Functional Organisation Design
3. Systems Landscape
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Programme Structure
The following structure has been agreed
for the delivery of the Irish Water Programme
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Project Overviews
The Irish Water programme has been divided into five key sub programmes of activity. Each sub
programme has a number of projects within it.
Programme Management
Company Establishment
Programme Management is responsible for running the overall programme, establishing the
governance model, managing the PMO office, engaging with key internal and external
stakeholders and providing guidance and direction to the rest of the sub programmes.
Company Establishment is responsible for all projects focused on the frameworks that need to be
in place to establish Irish Water as a company. The projects included here include: Finance,
Governance Regulation & Industry Model, Due Diligence, Commercial & SLA Approach, and
Customer Engagement & Brand Management, and Facilities
Business Capability
Establishment
Business Capability establishment is focused on the delivery of the capabilities (people, processes,
systems & data) that are required for a water utility to effectively deliver a service to their
customers. This following projects are included here: Customer Capability, Work & Asset
Management, Support Services and IT Infrastructure
Organisation
Establishment
Organisation Establishment is responsible for all projects that relate to the people elements of the
organisation. It incudes the following projects: Organisation Design & Development, Employee
Relations, Transition & Integration and Pensions
Irish Water Functions
Establishment
Irish Water Functions establishment is responsible for establishing strategic functions which
must delivered as part of the programme for the enduring organisation. It includes: Metering,
Capital Investment Programme, Delivery of Efficiencies, and Strategic Plan for Irish Water
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Irish Water Programme
Key Implementation Milestones & Challenges
May 2013 Launch Day 1: Launch of a campaign to inform customers on vision for the reform
programme and the benefits of establishing Irish Water
July 2013
Launch Day 2: Launch of a campaign to confirm customer details and commencement of
meter rollout programme
Q1 2014
Billing Day 1: Irish Water starts sending bills to domestic customers. Capability required:
– Bill c. 1.4m customers, process payments and manage credit and collections
– Customer database established
– Provide customer support through established customer contact centre by May 2013
– Testing and validation of meter reads
– Work and Asset Management System to support these functions operational by July
2013
Irish Water Programme –
Operations Day 1: Irish Water
begins to assume&
ownership
of assets, responsibility for
Key
Milestones
Challenges
Q1
2014Implementation
asset strategy and investment management. Local Authorities continue management and
operations of assets through SLA’s with Irish Water. Capability required:
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Service Level Agreements in place with Local Authorities in relation to operation
of assets, allowing for efficiency gains, use of technology, and robust enough to
last up to 2017 and possibly beyond
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Strategic planning and capital programme capability built up in Irish Water,
utilising existing expertise in Local Government Sector
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Asset Management Structure and Support Services capability in place in Irish
Water
Q3 2014
Billing Day 2: Irish Water commences take on for billing of non-domestic customers on a
region by region basis
Q1 2015
Operations Day 2: Irish Water assumes responsibility for all operations relating to Ireland’s
water assets, including work planning, management & execution, and day to day network
operations on a phased basis:
– Irish Water structure established and populated
– Full Work and Asset Management System operational and active through the SLA’s
– Ability to plan manage and execute work with field force mobility
Post 2017 End State: Irish Water operating model and capabilities are fully operational and in place
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Irish Water Supplement Procurement
Activities (in addition to existing expertise)
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Irish Water Programme Procurement Process has commenced
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Professional Services Frameworks (x 7 OJEC’s )
Legal Services Framework
IT Services and Resources Framework
Contact Centre Framework
Branding and Identity work
Media, Advertising and Print
Website Development
Public Relations
Engineering / Technical Framework Agreement ( including Facilities)
Subject Matter Experts (Qualification System )
Metering
Programme Delivery Services ( 9 lots )
IT Systems – VEAT notices
Procurement Plan
A&L Goodbody will provide (a)legal advice on procurement processes and governance and
(b) independent sign-off of compliance
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Funding and Funding Migration –
Water Services
Existing Funding
Structure
Proposed Funding
Structure
Domesti
c
Custome
rs
Business
Customer
s
DCELG
201
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Water Services
Funding today provided by
a combination of central
exchequer and business
customers
201
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201
6+
Business
Custome
rs
DECLG
Externa
l
Funding
Water Services
Funding in the future from a more
diverse range of funding sources
…. key requirements
• Asset Base (RAV)
• Economic Regulatory structure
• Predicable revenue stream
• Credit rating
Challenges in Funding
To fully realise its potential to reduce industry funding costs, Bord Gáis Éireann
needs the co-operation of the Local Authorities to manage the uncertainty and risk
Significant new funding
requirements
High level of uncertainty for investors
• Significant
capital
investment in the water
industry is required over
the next few years
• To transition funding
away from the taxpayer,
financing must be raised
from private investors
• As a new enterprise Irish Water carries a high
level of uncertainty for investors:
– Level of required capex is not fully known
– Cashflows from domestic billing may be
volatile in initial period
– No view on future replacement cost liabilities
can be made as the current water and
wastewater asset base is not understood
Higher water charges
• The greater the uncertainty
carried within an investment,
the higher the cost of
borrowing the capital needed
• This raises water charges for
everyone
With its Energy and Networks background BGÉ has a proven track record of securing private sector funding
against Utility operations
However to minimise the financing costs for Irish Water and subsequent water bill increases, it is critical that we
work closely with the Local Authorities to reduce the uncertainty and financing risk
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Bord Gáis has a Vision for Irish Water
“To deliver sustainable, high-quality and efficient water and wastewater services for the benefit of
the citizens of Ireland.”
Delivery requires:
 Build consumer confidence and meet customer needs
 Use the experience and expertise of the Local Authorities and the
Department, and other bodies in addition to Bord Gáis utility
experience
 Have an efficiency focus harnessing the scale
 Utilise Bord Gáis’ international financing capabilities to enable major capital
expenditure to be performed at least cost
 Build a solid governance structure and deliver exemplary customer service
 It must engage with the public and explain the objectives and the benefits
of reform