Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


Examination of Witnesses (Questions 380 - 399)

WEDNESDAY 21 NOVEMBER 2007

MR TONY WRAY, MR ANDY SMITH, MR MARTIN KANE, MR RICHARD AYLARD AND MR BOB COLLINGTON

  Q380  Chairman: Is there any sign that anybody is actually taking that work forward?

  Mr Wray: Yes, there is. All water companies and waste companies are in the process of putting together for the first time through public consultation, 25 year strategic statements. I know from my own company—and I believe for Thames as well—these are issues that we area taking very seriously and we are making practical suggestions about how we can start that journey, how we can practically re-engineer the networks over the long period of time to start to contend with some of these issues.

  Q381  Chairman: What assumptions on the weather are you making? Are you following the recommendations of the Foresight Report, for example?

  Mr Wray: Not only the Foresight Report, but the Climate Change Reports and any relevant and current information that we can find. We are taking that data and trying to predict what it is we will be dealing with in the future, what does it mean in practical terms for the drier and wetter climate that we are going to be dealing with? What are the implications on how we deal with the future sewerage and water supply demands of the future?

  Mr Drew: Moving onto sewerage, just a question for you, Tony, in terms of where you are with reed beds, for example. I believe Gerald Noone is known to you for some time.

  Chairman: He is not well known to me. Who is Gerald Noone?

  Q382  Mr Drew: Tony will say in a minute who Gerald Noone is, but there was quite an instructive dialogue going on about other ways in which we can deal with this enormous problem of sewer drainage. Can you say what your current attitude is to reed beds now that Gerald Noone has gone? You might also like to say who Gerald Noone was.

  Mr Wray: Gerald Noone was a previous officer of the company who led some of the company's research thinking about methods of treatment. Reed beds figure in our armoury of tools and techniques for dealing with sewage. We are looking at their application across a whole wide range but we have to contend with huge amounts of sewerage from large urban conurbations like Birmingham and Coventry through to very small amounts of sewerage in rural locations. The flow rates that you have to contend with there will dictate to some extent the nature of the design. The other thing that we have to deal with—and it is a feature I think of the water industry from what I can see, certainly for the past 20 years—is a huge amount of investment driven towards improving quality, quality of drinking water and quality of final effluent before it is discharged to the water courses. Because of that we now enjoy in the UK some of the highest standards anywhere in the world, but I think there is now a question to be asked about shifting the balance of that investment on from quality to dealing with quantity and the volumes that we have to deal with into the future.

  Q383  Mr Drew: Can I just ask Thames Water if they have a similar interest in reed beds?

  Mr Aylard: Certainly we have, but we have the same issue as with SUDS about the space required. If you look at our Becton plant which treats the sewerage from three and a half million people you would have to fill a full-sized tanker every two seconds to cope with that amount of effluent. There would have to be a reed bed larger than anybody could possibly comprehend. Even with some of the smaller works it is very difficult to find the space. Also ideally with a reed bed you need a natural drainage through it so you have to have the right degree of landscape to make them work properly. We do have some.

  Mr Collington: We have several sites that have reed beds and they are an effective method of treatment, but it tends to be for the smaller sites.

  Q384  Mr Drew: Could I ask about the issue of what expenditure you are prescribed to spend in the area of sewerage disposal by Ofwat? Do they give you enough flexibility or would you ask for more? I know you have to raise the money, but Ofwat have been quite difficult in terms of the amount of money they have expected you to spend on that.

  Mr Aylard: We have to make a good case to Ofwat for any expenditure of customers' money. That is quite right, they are the economic regulator and are there to protect the customer. We have to be able to show that any work we want to do either has a legal driver to it or it is to do with essential maintenance of existing assets, or that it is an improvement to customer service which customers would support. One of the things we are doing in the strategic direction statement Tony mentioned just now is that we are proposing that we would design waste water assets to cope with a one in 30 year rainfall scenario rather than a one in 20. Ofwat will want us to show that customers understand that and are willing to pay the extra costs of doing things to a higher standard. It is the point that the local authorities made earlier about balancing risk and cost in a sensible way.

  Q385  Mr Drew: How does that compare to the previous session? Oxfordshire—and indeed Duncan from Gloucestershire—were saying they were having to prepare possibly for a one in 300 event. You are talking about one in 20 or one in 30, that is a pretty differentiated planning process.

  Mr Aylard: Even that is very expensive. In Ofwat's defence in the previous five year price round the allocated us £80 million to relieve sewer flooding in individual properties in our area; this five years they have given us £320 million. That will relieve sewer flooding in about 6000 properties.

  Q386  Mr Drew: In terms of the changes the Government is now proposing for you to have as your re-adoption of responsibility, if you like, for the sewerage, how do you welcome that? You said you were willing to do it, but this is big money and you are going to end up with all those problems that I get when my sewer blocks and that is because nobody at the moment wants to take responsibility.

  Mr Aylard: I am not saying that we welcome it but it is something we are geared up to do; it is our job.

  Mr Collington: It is going to be quite difficult; we should not underestimate that. For Thames we currently have 67,000 plumbers of sewers. When the act changes and we get all the private sewers we are going to inherit overnight another 40,000 plumbers. It is going to be big money and what the Committee has to remember is that when we get that we have not records of those sewers, no information on how they were built and whether they were built to any acceptable standard. Most of the individuals who carry out maintenance on them at the moment are small franchise companies who turn up, clear blockages and leave again. It will be quite a challenge.

  Mr Wray: We are actually very supportive of the idea. That is not to diminish the practical and the funding issues associated with it, but we heard earlier on the discussion around riparian law and at the moment our industry has to deal with an issue where a customer calls with a very serious issue of a blocked sewer and the nature of the conversation is to first of all establish when the house was built to determine whether or not it might be our responsibility. From the perspective of serving consumers, from the perspective of maintaining good health standards for sanitation, that is ludicrous so it is a very good idea and we strongly support the concept of sewer adoption into one agency. However, as my colleagues were saying, we have to go through this very carefully to understand the nature of those assets and what it will take to bring them up to the required standard and then maintain them. In short it will be a huge insurance policy for all householders.

  Q387  Dr Strang: Recognising there is a role for a small rural housing development, am I right in saying that it is only satisfactory if the reed bed does not go continuously into a stream or a river; a reed bed that was adjacent to a running river would be ruled out presumably because of the risk of pollution. That is my first question. Secondly, are people actually artificially creating reed beds?

  Mr Aylard: The first thing is that they can go continuously into a river or stream provided that the standard of treatment that is provided by the reed bed is sufficient to meet the Environment Agency's discharge standards so it has to be very carefully designed and monitored. And yes, there are people who design reed beds on this scale commercially in this country and abroad.

  Q388  Chairman: Can I just try to probe, particularly with reference to a city like London, one of the things that I am totally unclear about is just how much capacity have we got in the sewer system? We have in previous inquiries had discussions about the state of the sewers and the investment that may have to be made to upgrade them, but luckily when they put the Victorian sewers in they seemed to put a fair amount of spare capacity in. I would be interested if one had a sort of uniformed rainfall over London can you tell me at what level and for how long it has to rain before the sewers fill up? In other words, they are absolutely full, they cannot cope, they cannot discharge into wherever they go to? I am not certain how bad the problem is.

  Mr Collington: I think the honest answer to that question is that it varies depending on the type of event, whether it is a high tide or low tide in the Thames, how long it rains for and what the pluvial conditions would be.

  Q389  Chairman: Let me try to relieve you of this variable nature of your response. If we said, bearing in mind that tides run on a 12 hour in and 12 hour out, that over a 24 hour period there were three or four hours of the kind of intense rain that may be associated with an extreme weather event in a tide in situation in London, when do you reach full? How many inches of rain have to fall?

  Mr Collington: Most of the time we can cope with three, four, five, six inches of rain for 45 minutes to an hour continuously. When it gets beyond an hour of continuous rain and there are five or six inches of rain then the sewerage system starts to struggle. If you look at 20 July we had three or four hours of continuous rain; we have six to seven inches in places and we had areas of London where the system could not cope. Most of the major barrels of sewer that run underneath London are nine foot in diameter; they tend to run east to west across the city. There are large pumping stations that run along the River Thames to pump out the sewerage system in times of extreme weather and there are a number of overflows from the sewerage system that act like pressure relief valves on the system to spill sewerage into the Thames. That is the way the Victorian system is designed. We are in the process at the moment of building a large super sewer which will take 14 or 15 years to complete which will take away those overflows and provide a storage system in the base of the river for Thames' sewerage system. We are blessed by the legacy of the Victorian system.

  Q390  Chairman: If we are looking at the show stopper issue flooding wise for the centre of London—let us leave the Thames Valley slightly out—the impression I get from what you were saying is that if you carry on with your super sewer you can pretty well cope with the types of event that you have described. If we turn it into the one in so many years event, what kind of event are we talking about that you are trying to cope with?

  Mr Collington: The type of events that we are funded for by Ofwat are anything up to one in 20 year rainfall return period. Ofwat do not fund companies to deal with anything beyond that.

  Q391  Chairman: If we go back to the July event; what was that in so many years?

  Mr Collington: In the rural areas that was a one in 150 year storm. In parts of London it was over one in 100 years.

  Q392  Chairman: So if London were hit by a one in 150 year event you could not cope.

  Mr Collington: There are parts of London that will cope; there are parts that struggle to cope. Those are areas where we experience flooding at the moment.

  Q393  Chairman: You mentioned river side pumping stations and one of the issues that came out of Gloucestershire was the question of the vulnerability of infrastructure. I would be interested to know in a capital city like London how vulnerable is the infrastructure. Obviously in terms of the level of investment that you have to sustain to keep the capital city going, depending on what you want to sustain depends on how big a bill Thames Water payers have to bear. I think it is that scenario which I find difficult to cope with, to understand levels of investment versus levels of protection versus vulnerability.

  Mr Aylard: I think it would be quite rare to get the same level of rainfall across the whole city. We tend to get these one in 150 bursts which are very, very localised. Sometimes they will hit an area with a network that can cope and sometimes they hit an area that cannot. Part of the problem is that in those circumstances you cannot get the water away quickly enough and that is why it floods. We are doing a very detailed update with all our resilience work using the Environment Agency's flood risk data. We are looking first of all at the likelihood of flooding happening; secondly, what the impact would be on our operations, on our customers, on other infrastructure in the area (places like Heathrow for instance) and then at the cost benefit analysis of that. That will all form part of our strategic business plan that goes to Ofwat in 2009. You can be reassured that we are looking again at all this.

  Q394  Chairman: If it as localised as you suggest, do you sort of take one mile square areas and say that if that kind of one in 150 year event occurred here what do you think might happen?

  Mr Collington: We look at rainfall data in one kilometre squares and we look at critical assets and then we have drainage area plans which basically come down to one kilometre squares.

  Q395  Chairman: So at the end of this exercise you would be able to present to your shareholders and to Ofwat and to the public a menu which says that if we want this degree of protection it is going to cost that much in these locations. Is it going to work like that?

  Mr Aylard: Broadly speaking yes. I can give you an example from the 20 July flooding. Our Grimsbury water treatment works was flooded to a depth of about six feet. We knew that Grimsbury was liable to flooding; we had put in place a one in 50 year scheme some years ago which consisted of a large band around the site. We are also working with the Environment Agency to design a one in 100 year scheme but what we got was a one in 150 years. At that point we fell back on the contingency arrangement for re-zoning the network and making sure that our customers could be supplied from other works. There is a whole series of things to try to reduce the risk to customers, starting with physical measures and going down to re-zoning and ultimately to tankering.

  Q396  Chairman: How does Severn Trent undertake similar scenario playing that we have just heard about from Thames?

  Mr Wray: In very much the same way. We have the area drainage plans, we review those on a regular basis and keep track, from the best of our knowledge from the local authorities, where developments are going to take place, how much capacity we have (we have run hydraulic modelling for each of those areas and we try to predict where we are going to see the capacity constraints). What we then do is point our investment to those areas. For instance, this year we are completing major sewerage capacity schemes in places like Leamington, Kenilworth, Hinckly so we are keeping a constant review on the networks for where that capacity constraint may fall and trying to stay ahead of that with building that capacity into the network.

  Q397  Chairman: Do you think from your respective companies' points of view, bearing in mind that the impact of extreme weather events are very unpredictable—they may well be associated with the global phenomenon of climate change—that it is still right for the water charge payers in each of the areas that you respectively serve to bear the full cost of dealing with the impact of these matters or do you think there is any merit in looking at the collective sharing of perhaps an element of extreme weather event expense on a national basis?

  Mr Wray: My personal view is that whilst there are still a lot of shades of opinion on climate change it is undeniable. Actually that is the stance we take as the company and that is embodied in our strategic direction statement. Coupled with that, certainly through the events of Gloucestershire despite the magnificent mobilisation that we have heard about from all of the agencies and customers, we have just gone through a period where we now have to deal with a paradigm shift in our thinking of what is acceptable risk. In the short term I think there are absolutely things that we can do and should do that inform our plans. In the long term I think there is potentially a huge investment burden required and we have to figure that out, how much of that comes from the consumer directly and how much of that, if any, comes from taxation. The one thing that is clear and not well understood about our sector is that every year for Severn Trent since the year of privatisation—and I do not think any other company is different to this—the net investment in progressing the infrastructure and dealing with the quality standards is far greater than the actual profit made in the year. That is likely to be the case for at least the next 20 years because of the need to continue with the modernisation of the networks. Unfortunately that cost burden will fall. I think it needs to fall in such a way that consumers have sufficient information and transparency to be able to comment on what they deem is the rate at which we do that; what is affordable at any point in time.

  Mr Aylard: I very much agree with that.

  Mr Collington: I think the key thing for me—and it was mentioned in the previous session—is that unless we actually take an integrated approach to this we are not going to solve the problem. There are areas of Kensington and Chelsea that flooded in July this year; they also flooded in severe wet weather events in 2004 and 2005. I know the answer to the problem for that area in London is to build a huge sewer and to take the sewage to the Counter's Creek, but there is no way the river could cope with that. Therefore, if I solve the problem for the residents of Kensington and Chelsea I just move it somewhere else in London. Unless the Environment Agency and the companies and the local authorities work together to solve these problems, all we are going to do is shift the problem from one place to another.

  Q398  Chairman: You would be very popular if you shifted Kensington and Chelsea to certain places; there would be a bit of a riot there.

  Mr Collington: The cost is huge. For that one scheme we have estimated the cost to be £90 million.

  Mr Aylard: It is about half a million pounds per property that would be helped by the scheme.

  Q399  Chairman: You could always turn Chelsea's pitch into a sort of SUDS; that is a possibility. Anyway, before we get too many flights of fancy let us move onto the Civil Contingencies Act 2004. In terms of business continuity plans perhaps you could just describe to us what your duties are under that Act. I gather that, under what is described as the Security and Emergency Measures Direction, that puts a requirement on you to keep under review and revise your emergency plans and to ensure that you have the provision to maintain essential water supply and wastewater at all times. How do you do it? In the case of South West Water you could not quite do that really through pipes because you had a bit of a problem. My friend Mr Drew will come onto the Mythe Valley but perhaps you could comment on these overall powers and how you adhere to your legal requirements.

  Mr Wray: For Severn Trent Water we have a whole range of responses to that which run not only to maintaining alternative supplies—which we do through provision of bowers and bottled water (I will talk more about Mythe and Gloucester in a moment)—but also through a whole range of measures not just for the interruption of supplies which can be from a break in the distribution because of civil activities going on—street works of some form—right the way through to disruption of supply such as, on a river intake, dealing with pollution coming down the river which is the source of water. Unfortunately we do live in a society where there are agencies who would seek to do damage to things so there are a whole range of contingencies that we have to make available there. In response to those we go to great lengths to diversify supply on the networks to provide multiple supplies, to physically protect sites and assets and, in the event of loss of supply, the ability to make alternative supplies available. The issue that we had this last summer was that we were dealing with an event of a magnitude completely outwith any experience, not just of Severn Trent, but on a scale anywhere in the industry. That presented us with huge problems which were dutifully overcome with the all agency support that we had and has presented us with a huge number of lessons which we are now working our way through and sharing them as widely as we can such that everybody can benefit from that work.


 
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