Suppliers can cash in on UK water industry spend

London -- UK water and wastewater companies look set to accelerate their maintenance, infrastructure, quality and environmental improvements during the next three years, says IMS Consulting. The push, notes the market research firm, will be needed to make up for delays at the start of the current five-year, £17bn-plus AMP 4 investment programme.

In a new report, titled Selling into the UK Water and Wastewater Industry 2007-08, IMS examines progress on the 2005-10 AMP 4 investment programme to date on a company-by-company basis and analyses of the key drivers behind purchasing decisions in the industry.

According to Elaine Coles, head of market research for IMS: “It’s generally acknowledged by both Ofwat and the water and sewerage companies that the transition from one investment period to the next and the accompanying slowdown in work creates problems for suppliers – and AMP 4 is no exception.

However, added Coles, work is now accelerating and companies who are on the ball and up-to-date with new developments are in a strong position to capitalize on the opportunity.”

So while some suppliers to the industry may have experienced difficulties or a downturn in workload since 2005, moves by the industry to ensure that they get back on track with major projects is likely to offer significant opportunities to do further business.

Acording to the IMS researcher, some of the major framework contracts are also due for mid-term review in 2007 which may also herald changes in current business arrangements.

Soaring energy costs is another key factor likely to impact on the workstreams coming out of the water companies - with a number of cheap fixed-price energy contracts now coming to an end, the industry is looking with renewed interest at energy-efficient technologies and services with the potential to reduce or at least contain their massive power bills. Containment of CO2 emissions is also becoming an increasingly important driver in the way the companies do business, especially in the light of Ofwat’s new focus on sustainability.

The new Report highlights key upcoming opportunities to sell into the sector and includes details of many of the major contracts in place which are due for renewal or replacement - including start, end, extension options, value and current contract holders.

The report aims to explain the issues that directly impact on the water companies’ purchasing decisions to use in their own sales and marketing strategy and develop their own sales pipeline opportunities, according to Coles. This, she said, covers their decision-making processes, existing purchasing arrangements, what they're planning to spend, when and why they're planning to spend, major projects and budgets and key project partners.