Mr. Jerry Grant:

Mr. Barry spoke about the investment in and the work on the asset management system. The value of that system is that it brings us from a position where there was very little visibility of asset records and performance to one where across the 50,000 km of pipes, the 10,000 above-ground assets and, in particular, the more than 2,000 treatment plants we will have both data on what they are, their size and capacities and their condition. Over a couple of years, as we roll out workflow management, we will be able to attribute the operational expenditure, maintenance activity and repair activity to these specific assets. The starting point is that there is a reasonably good, although somewhat out-of-date, geographic information system, GIS, for water mains which was developed mostly in the past 12 or 15 years. It is not too bad in terms of where the pipes are and the basic information available on materials. It is not particularly good, however, on things like burst history, condition and fragility of the pipe. It certainly does not pinpoint leakages.

In terms of sewers, we are not in such a good place. There is a certain amount of information available on the GIS and mapping which we have started to pull together. By the end of 2014, we expect to have all existing data on the layout and whatever information is available on all underground assets. However, there will be big gaps, particularly on the sewerage side.

In terms of treatment plants, there is a lot of publicly available information that we have collected which arises from the Environmental Protection Agency's reporting on drinking water quality and which references all plants, as well as schemes and water quality information. Moreover, wastewater plants have been the subject of licence applications which provide a lot of detail on the plants and in general on where they are short in being able to meet either capacity or compliance standards.

Consequently, with a little maturity and additional surveys and work, we will end up with a national database of all the assets. We will have standard policies and specifications and standards for all equipment across these assets. We will have the capacity and the customer service that we can deliver throughout the system. From all of this, we will be able to calculate the risk of not being able to comply with service needs. Fundamentally, that is what will drive investment. It will be tailored at a target risk of compliance or service provision that should be consistent across all customers. Consequently, it should not matter whether one lives in a city or a rural area. If the system is working well and one is investing properly and targeting capital maintenance, in particular, one will have an equivalent result and over time bring that standard up to where it needs to be.

Perhaps one of the biggest gaps in the water services area has been the lack of planned proactive investment in maintenance. This is part of the reason we end up with assets in some places that are not fit for purpose. Essentially - this is particularly true of the high growth period from approximately 1990 - all investment had to be in two areas. The first was chasing capacity because we needed additional capacity, while the second was dealing with compliance with European standards. As a result, almost nothing went back into the older assets which were deteriorating behind our backs.

This is the basic model against which one plans the work one seeks to do. One can then introduce measures such as spending to save, for example. There is considerable potential for us to reduce operating costs by putting in new equipment to reduce energy costs, chemical usage or sludge production, as well as repairs. One key outcome in any 12 month period should be considering where one is spending one's money on repair and maintenance work and ascertaining where one could replace a particular part of the asset base. Even in respect of leakages, for example, a joined-up approach that involved more intensive find and fix measures in respect of items such as pressure management to reduce stress on the system would indicate to us - we will be mapping all of this activity - where we needed to go to replace pipes that would produce the biggest yield in reducing water losses. This has allowed me to explain how the investment Mr. Barry described effectively will underpin the entire approach to operation and, in particular, maintenance of the asset base across the sector.