Water Services Training
Group
15th Annual Conference
Water Services in Ireland –
Organisational modernisation
and new challenges
13th October 2011
Annual Conference October 2011
Value for Money Review
of the WSIP 2007-2009
Mr. Tom Curran
Kerry County Manager
Chair of the CCMA water
services committee
Annual Conference October 2011
Expenditure Review – Why?


Secure improved value for money
from public expenditure
Evaluate efficiency and effectiveness
of WSIP 07-09 (Subhead C1 – major water and
waste water schemes)


Examine continued relevance of
programme
Inform future investment decisions
Annual Conference October 2011
Expenditure Review – How?

Dept of Finance guidance on VFM reviews which
set out methodology
Steering Group – (DECLG/Finance/CCMA – Independent

Review included an evaluation of:

Chairman)
• The broader context for investment in water services in
Ireland
• Particular features of this sector
• Existing funding and delivery model
• A range of evaluative studies
• Compliance reports by EPA
• EPA data on achievement of environmental objectives
Annual Conference October 2011
Methodology contd…
• WSIP data on achievement of objectives
using input and output data
• Targeted consultation with key
stakeholders
• Assessment of alternative sectoral
models
• Illustrative project sampling exercise
• A sample of DBO schemes
• An assessment of cost data for a sample
of completed schemes during 2007-09
Annual Conference October 2011
WSIP 2007-2009
Annual Conference October 2011
WSIP 2007-2009
WSIP 2007-2009
WSIP 2007-2009
Key Findings


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Objectives of the WSIP remain legitimate and will
continue to be valid in the medium to long term
The WSIP will require continued high levels of
investment
The Report underpins the relative prioritisation of
the WSIP within the capital envelope
Medium term – need increased focus on
reducing UFW and deficiencies in
infrastructure in gateways and hubs
Review identifies measures to improve efficiency
Recognises that water services investment has a
key role to play in supporting Ireland’s economic
recovery through provision of capacity
Annual Conference October 2011
Conclusions
Effectiveness = Extent to which objectives are
achieved and benefits delivered

WSIP has been reasonably effective in delivering
on its objectives;

Greater priority is required for Water
Conservation Sub-programme (Section 4.6.3);

Development of future assessment processes
(stronger evidence base; investment cycles to
distinguish proposed time frames for schemes;
communication of national priorities) (Section 7.2.3)
Annual Conference October 2011
Conclusions (2)
Efficiency =relationship between
inputs (expenditure and personnel)
and outputs (goods or services)

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Positive correlation between inputs
and outputs
Programme efficiency can be further
improved
WSIP 2007-2009 (by value)
WSIP 2010-2012 (by value)
WSIP 2010-2012
6%
17%
22%
26%
29%
Contracts/schemes in progress
Commencements
Schemes in planning
Planning of major long-term projects
Water conservation -contracts to commence
Efficiency
Increase in water & wastewater treatment capacity in terms of population equivalent
4,000,000
4,000
3,500,000
3,500
3,000,000
3,000
2,500,000
2,500
2,000,000
2,000
1,500,000
1,500
1,000,000
1,000
500,000
Unit of Measurement (€ooo's)
Unit of Measurement (pe)
Cumulative Expenditure
500
0
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Year
Water Treatment Capacity
Wastewater Treatment Capacity
Water Services Investment Programme - cumulative spending € m
Recommendations - Efficiency
Measures

Project Appraisal

Project Delivery

Project Management

Monitoring Efficiency

Water Pricing Review
Annual Conference October 2011
Project Appraisal 
Economies of Scale - potential for
• Grouping across authority boundaries (with a river basin
perspective);
• grouping of schemes not just in terms of geographic
proximity, but also in terms of similar level of priority re
compliance.

Achieving correct project scale
• The report recognises that for differing reasons, i.e., the
achievement of lower unit costs in large scale projects;
and the achievement of high levels of statutory
compliance through a range of identified small scale
actions; the greatest efficiencies are achieved by
an appropriate balancing of the Programme to
maximise efficiencies that can be gained at either
end of the spectrum
Annual Conference October 2011
Wastewater DBO Contracts – DB
Cost per PE
Water DBO Contracts – DB per Ml/day
Project Appraisal - Preliminary
Reports

Guidance on Preliminary Reports to be
updated to:
- ensure improved project scoping;
phasing; and affordability/cost issues;
- reflect issues arising in spot checks and
capital appraisal guidelines and capital
works management framework;
- reflect new approach in 2010-12 WSIP
through sequencing of contracts and river
basin approach
Annual Conference October 2011
Project Delivery

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Develop a streamlined statutory process to
enable water services projects to proceed more
expeditiously through planning
As 30% of schemes in planning in WSIP are
valued between €1-5m, but account for only 6%
of value – examine scope for further devolved
procedures under WSIP
develop a multi-annual approach to the small
schemes measure under the Rural Water
Programme (in consultation with CCMA and
NRWSC) synchronised with WSIP investment
cycle (to include a discretionary and targeted
element)
Annual Conference October 2011
Shared Services Approach

Proposals for roll out of shared services to
be developed within 12 months of
publication of VFM report in consultation
with CCMA
• Established on a river basin structure;
• As a minimum involve sharing of services in
planning and procurement; project
management of large schemes; collation and
presentation of regional information; strategic
planning;
• Can provide platform for development of a
national agency.
Annual Conference October 2011
Project Management
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Role of Project Steering Groups should be
strengthened (Directors of Services to attend,
standard reporting)
WebPCS should be further developed and
expanded to incorporate a management module,
and to develop the programme management
aspect
An updated procedures manual should be
provided to all water services authorities by the
Department on a three yearly basis setting out all
key circular and policy documents required to
implement the WSIP
Annual Conference October 2011
Monitoring Efficiency

Performance Indicators
• Develop formalised structure for
reporting on agreed indicators aligned
to each investment cycle
• Publish summary of each WSA’s
performance indicators as part of each
WSIP

IT based PMS to be used on all
plants for comparative purposes
Annual Conference October 2011
Water Pricing

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An independent review of water pricing
policy should be carried out and should
include:
An assessment of its appropriateness
An evaluation of its implementation
Recommendations on integrating domestic water
charging
Assessment of adequacy of structures for
implementing and monitoring pricing policy
Recommendations for alternative flexible
approaches to the application of polluter pays
principles
Update



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Report was approved by the Steering Committee
and the Secretary General, and was submitted to
the Minister and presented to the Oireachtas in
line with Depart of Finance requirements.
Published in June 2011
Copies issued to all Water Services Authorities
and available on Departments website
www.environ.ie
Department accepted all recommendations and
an action plan to implement them is now
available on the Departments website
Annual Conference October 2011
Current Developments


Programme for Government
commitment to set up Irish Water –
a new State company to take over
water investment and maintenance
programmes
VFM report is a valuable input into
current independent assessment on
establishing the new water company
Annual Conference October 2011