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Turn-Key Solutions for Direct Procurement

 
 
 

 

As an innovation-driven business, K M Plant specialises in delivering Turn-Key Solutions for Water Industry Utilities seeking Direct Procurement value within their Supply Chain, and thusly assisting the Utilities in meeting the desired practical methodologies as sought by Ofwat for PR19 and AMP7.

Innovation within the Water industry is more generally driven by evolution than revolution, but companies such as K M Plant, are slowly transforming the Industry and pushing forward highly innovative concepts and methodologies to create better value for the Utilities, and their Customers.
 

Ofwat has indicated four key areas it is seeking the Water Companies to focus their PR19 Business Plans on addressing, essentially: Affordability and Value, Customer Service, Resilience and Innovation.  Ofwat has confirmed that of these facets, Innovation is potentially the most over-arching, as a mechanism for facilitating the delivery of the other three, 

 

Senior Director of Water 2020, David Black, states that Ofwat sees Innovation as essential to enabling the Sector to deliver more of what matters for its Customers, and that Ofwat is keen to incentivise effective Innovation, to realise the potential benefits to Water companies and their Customers.  

 

David Black confirmed that companies with the most innovative and ambitious plans that deliver real benefits for Customers and effectively raise the bar for others, will receive an additional return. Ofwat recognise that Innovation will not come from the Water companies alone, and that highly engaged companies such as K M Plant, can drive this innovation from within the Supply Chain itself, through Direct Procurement, delivering better value up the line.  

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

Among the stimuli for innovation proferred by Ofwat, will be a price review which breaks with past conventions, rendering the creation of new assets the solution of last resort, rather than the first. This is reflected in an adjusted Weighted Aerage Cost of Capital (WACC) in PR19, that is expected to be at the lowest level since the privatisation occurred, coupled with an anticipated fall in revenues, due to downward pressures on Customer charges, amongst other factors adding likely commercial pressures to AMP7.

 

K M Plant actively supports Clients in respect of Direct Procurement for Customers ('DPC'), a new Ofwat initiative for PR19.  Under the DPC, Water companies are expected to competitively Tender service provisions for discrete, large-scale projects, with an anticipated whole-life total costs ('TOTEX') of in excess £100m. This differs from current Procurement norms, in that the Tenders are expected to cover more aspects of service, such as Operations and Project Finance.  This significant departure from previous conventions, is intended to deliver reduced total costs for larger capital projects, including the cost of operations and related financing, over a potential 15 to 30 year timeframe, which will therefore span numerous Price Review periods.  With the Ofwat PR19 determination likely to bring about a reduction in Customer bills, and a lower WACC, going forwards.

 

K M Plant is an Achilles Utilities Services Vendor Data Base Tier 2 Pre-Qualified Utilities Services Provider, thusly Water, Electric, Gas Utilities, Telecommunications Providers and Major Tier 1 Construction and Civil Engineering Contractors can invite K M Plant to participate in Pre-Qualified Bidding and Tendering activity on their proposed Works and Contracts. 

 

 
 

 

To discuss how Direct Procurement from an innovative provider like K M Plant can transform your business, contact K M Plant's Commercial Team

on 0203 146 8892.