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  • Richard

Storm overflows 2

A couple of colleagues in India have been sending me references to the Guardian newspaper's coverage of the sewage discharges, perhaps more common than some of us had realised, and the new environment legislation presently going through Parliament with the Lord's Amendment to make it mandatory for the water companies to stop discharges to rivers.

Which over the years since 1989 privatisation has required a regulatory compromise - as it is about not so much sewage as highly diluted storm overflows (but not always it has become clearer). So if the government accepts the amendment it would mean the regulator having to agree to very significant tariff increases to fund the billions of dollars required just when households are being asked to fund green energy investment.

I suggested in reply that this issue was a bit like taking Delhi Jal Board to court for not delivering potable water to all inhabitants 24x7 within the next month …. Some things take a fair bit of time AND an awful lot of money.

For in addition to $6billion on Thames Tideway, referred to earlier in these blogs, in the rest of the country the rivers are faced with significant farm slurry and field run-off pollution loads - plus WWT outfalls and, yes, storm overflows.

And yes, the system has been gearing up over the past 30 years since privatisation to monitor a) the overflows and b) the resulting pollution load ... perhaps proving the point that 'if it is not measure it is not managed.' The companies were only required to start monitoring relatively recently, I could guess that was another regulatory compromise, knowing that it would lead to demands for major CapEx - at the expense of customers of course - to then address what the enhanced monitoring had found.

The British press still doesn't seem to understand that the 'private companies' have to operate more like 'contractors' than owners of their assets (though they do own them as they have funded all CapEx for the past three decades, but that paid for by customers). Every five years the private companies put forward their Asset Management Plans and the resulting required tariffs. Ofwat, in its Final Decision on tariffs then demands greater efficiency but also starts reducing the CapEx, both for water, including water resources for resilience, and for sanitation, including WWT and, yes, storm overflows.

Because however 'independent' Ofwat is, it still has to follow policy guidance from government and, ever since the 40% increase in tariffs in real terms in the first decade of privatisation (a very necessary 'catch-up' some would argue), government has indicated that price stability is critical and that all desired CapEx has to fit into that context.

You can see in the figure above, in USD per person (2020 prices at PPP exchange rate) how much the country was prepared to invest in first time sewerage in the '50s and '60s and then thought enough had been done. The yellow highlighted area is the privatisation area - although government in privatising the industry had assumed that ongoing investment would be able to fall again quite significantly ... the needs keep being revealed and the CapEx continues - at about $80 per person (not per household!) each and every year - with something similar for water.

And yes, one of the companies has been found cheating on their records and discharges from overloaded treatment works and have recently been fined approx $100m - which would never have happened in the public provider days.

But the costs of sorting out combined sewers (they may start off separated but always end up combined to some extent) are massive ... hence some of my scepticism about the CWIS approach for lower-income countries when it expects 'regulators' to be able to sort out the problem ... it is a generational challenge, and as soon as one generation thinks they have sorted it the next generation finds they have to spend more on enhanced wastewater treatment or water reuse or even rehabilitating the surprisingly expensive sewer network itself.

And I suspect the net zero carbon challenge will quite overwhelm govt and citizen preparedness to fund even higher standards for sewerage .... when citizen's electricity and fuel bills are doubling ..... public policy choices!!

Particularly as we now learn that Govt is briefing that 'as an approximate estimate, to get rid of or eliminate sewage [storm] overflows would cost between - these are very wide figures - £150 billion and £660 billion. 'One must consider the cost of bills, because there will be an impact on those.' "Much of our sewage system dates back to the Victorian era and we can't just shut it down or replace it overnight. Nor do we want to burden ratepayers with a price shock they can't afford."

Whilst other lobbyists are suggesting it might 'only' be at the £6-10 billion level.

Whatever the cost, there will always be some storm overflows - otherwise the alternative is sewage backflowing into people's homes ... and the costs of that are stupendous too - as a - perhaps too price reviews ago - slide indicates. These are costs per household protected from storm/sewage flooding in vulnerable areas:

Yes, getting as high as $2.5m per 'high-risk property' - thankfully the regulator excluded most of those properties from the point of view of bill-payers. Not from the point of view of householders who continue to suffer flooding.

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