Earlier this month, we facilitated the French Australian Chamber of Commerce, Transport & Infrastructure video conference, Challenges & Opportunities for the Queensland Water Infrastructure Sector.
The impressive panel bought together speakers from both the public and private sectors and included Fiona Waterhouse from Utilitas Group and Unitywater, Yvette Waterfall from Veolia Australia & New Zealand, and Graham Dooley from Water Utilities Australia, who each shared their insights on the future of the water industry.
The Queensland water sector is facing major challenges presently and into the future, including climate change and ageing assets. Advances in technology, markets and planning may help overcome these challenges to a certain extent, but significant policy and regulatory changes may be needed to ensure the resilience of the Queensland (and Australian) water supply in the coming decades. The panellists shared their views on how these issues are impacting the water industry now and how we can start making changes in the industry.
Forces impacting industry
The panel was unanimous that ageing infrastructure is a significant (and possibly the biggest) issue facing the water industry today. There are 678 municipal sewerage treatment plants across Australia, around 60 per cent of which were built between 1930 and 1980. Historically, these are structures which were described as monolithic and virtually impenetrable, and were designed to last decades.
This robust construction often makes adapting the existing infrastructure to suit modern technology difficult and expensive. It is cost and time that many asset owners cannot afford, especially in the current climate.
Another issue that all panellists agreed would pose difficulties for the industry was restrictive governance. Water is an essential service and therefore will always be regulated, but we need to reconsider how we regulate the water industry and regulate in a way that allows and encourages innovation and change. These issues with governance are compounded by the fact that regulation differs vastly from state to state.
Fiona Waterhouse talked of the complications with tendering and ownership of land for the Bundaberg Biohub and said that even with significant help from the local council, these issues were difficult and time-consuming to navigate. This kind of process-driven delay can be stifling for innovation. It is only due to the perseverance of Utilitas and the Bundaberg Regional Council that this project is now taking off.
Another hurdle for the water industry is, of course, climate change. The needs of the water industry may look very different in the next 50, or even five years than they would have been previously. As some parts of Australia get drier and some parts get wetter, attention needs to be paid to how we navigate these changing weather patterns to ensure continuity and reliability of water supply.
The 'next big thing' in water
In light of these challenges, the panel spoke to what they considered as the 'next big thing' in the water sector. Adaptive infrastructure was a common theme. We need to look at the assets differently and use packaged equipment that is more easily adaptable for future needs.
In the meantime, the difficulty and expense of refurbishing outdated infrastructure make it crucial that modern technology, such as biogas processing, can be utilised in a way that makes these centres profitable, or at the very least, cost-neutral.
The panellists were unanimous that a collaborative contracting approach was the means of tackling these challenges. Yvette Waterfall raised the need to involve the whole supply chain so that each person along the chain derives value from the transaction. The existing ideal of a 'turnkey' contract whereby risk is attributed to the party with the deepest pockets usually comes with a hefty price tag. In addition, the long lead times on water projects means that when stakeholders are getting caught up over where to attribute risk, they fall even further behind the march of technology.
The panel agreed we need a collaborative approach that sees each party taking on the risk that they are equipped to handle and being appropriately compensated for taking on that risk. This may also help to address the status quo which considers new innovative approaches too risky. If, however, the risk is distributed more equitably and suitably, this may encourage parties to take on this limited risk and adopt a 'we're all in this together' mindset, rather than expecting one party to bear the whole weight of the risks that are naturally associated with innovation.
How to make changes in the industry
So how do we advance the water industry towards a more sustainable and profitable future?
Whilst it is clear that we need to find a way to embrace innovation and allow room for failure, the credibility of the industry as a supplier of essential services needs to be maintained – it is about striking the right balance and finding a pace of change that is sustainable, so we can bring all stakeholders along.
The panellists all agreed that this can be done through leading by examples, such as the Bundaberg Biohub. We can also look overseas to the wealth of knowledge and first-hand experience at our disposal. Perhaps the key change to achieve this is to change our mindset – the most difficult change to make.
As Graham Dooley stated, regulation will always be a necessary evil and the industry needs to find a way to ensure that all stakeholders are included in paving the path forward. Communication and education clearly play an important role in the move forward.
Conclusion
What is clear is that there is a desperate need for adaptation – adapting ageing infrastructure to accommodate new technologies, adapting to climate change, adapting laws and regulations governing the water industry to best suit the needs of all stakeholders and, arguably most importantly, adapting our way of thinking.
There is a common theme of meshing the new with the old, and embracing and encouraging innovation with an industry that is supportive of just 'giving it a go'. We must be prepared to fail (preferably quickly and cheaply) to allow innovation to flourish. That means no more 'tall poppy syndrome', amongst other mindset changes.
COVID-19 has presented the water industry (and the world), with an opportunity. In a world where 'business as usual' is not usual anymore, it seems that now is the right time to push beyond the water industry as we know it. The question is, are we up for the challenge?
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