In the know
Digging deeper: resilience
Making the case for
resilience
Building resilience requires
water utilities to have
a clear and systematic
understanding of risk across
their business
BRENDAN MCANDREW
WATER INDUSTRY CONSULTANT
MWH
M
any of us are familiar with
the proverb of the 'horseshoe
nail' where a kingdom falls
after a battle is lost because a vital
message failed to arrive when a loose
horse shoe caused the horse to fall
and unseat the messenger - all for the
want of a horseshoe nail.
The proverb provides a useful
illustration of one of the challenges
which the issue of resilience presents
to the water industry. A major failure
followed from a seemingly trivial
error of omission, the significance of
which would not have been apparent
to the farrier. Only with the benefit
of hindsight, could the causal links
between a series of events be seen
clearly.
For 'missing nail', read 'inoperable
or inaccessible isolation valve'
or 'blocked emergency outfall'
and it is not difficult to construct
scenarios where significant service
disruption could arise because of
similar omissions or oversights
or to contemplate the difficulty
of identifying the vulnerability of
services to such risks.
A clear and systematic
understanding of risk
When Ofwat launched its consultation
on the outcomes framework for
PR19, in November 2016, it set out
its proposed resilience planning
principles, the first of which was the
requirement for a better and more
A relatively small failing could result in major consequences in some areas
integrated understanding of service
risks.
Ofwat indicated that companies
should carry out resilience risk
assessments that provide a clear and
systematic understanding of service
and systems risks across their entire
business. It is difficult to argue with
the principle, but putting it into
practice raises many questions about
the scope and level of detail required
for such an undertaking.
Deciding what constitutes 'a clear
and systematic' understanding of
risks across the 'entire business' is an
important judgement which will be
exercising the minds of many in the
industry. The level of risk assessment
which companies could reasonably be
expected to undertal<e in this context
must be informed by the expectations
of their customers. Ofwat's resilience
planning principles clearly articulate
the need for customer engagement on
the topic of resilience.
Established investment planning
processes, which companies have
developed over successive price
reviews, have evolved to capture and
assess risks. These are identified by
those who operate and maintain the
assets, and by asset management
and compliance teams who identify
deteriorating performance and sub­
threshold failures and trends.
These processes are weighted
towards asset systems which are
subject to current failures or have
demonstrable performance issues,
without necessarily evaluating
the vulnerability to other threats
or pressures which have yet to
materialise.
The customer outcomes which
companies currently deliver could
be seen as evidence that services are
resilient to a range of current shocks
and stresses, but are not evidence that
those services are inherently resilient
to all potential shocks and stresses.
Aligning risk assessment
processes
So what more could companies do to
align their resilience risk assessment
processes with tlle principles which
Ofwat has set out?
Deciding how far to go in
systematically identifying resilience
to wider threats across the whole
business is a genuine dilemma for the
industry, and one where appropriate
benchmarks of best practice are
difficult to identify.
In tlle business planning context,
seeking to identify tlle water or
wastewater equivalent of every
www.wwtonline.co.uk I WNf I APRIL 2017 I 35
I th� now
Digging deeper: resilience
missing horseshoe nail is unfeasible.
However, if we consider that the
principal threat in the proverb was
a vulnerability to communication
system failure (it was the message
not getting through which was the
real problem) then undertaking a
systematic review of such threats
becomes more manageable.
For water companies to
demonstrate that their assessments
have resulted in a clear and systematic
understanding of resilience, they
should at the very least be able to
present a clearly articulated set of
principal threats to service which the
company has identified and against
which it has carried out some level of
systematic assessment.
Those principal threats to service
might include loss of communications
or power, critical asset failure,
flooding, extreme weather,
contamination or deterioration in
raw water quality, loss of hydraulic or
process headroom, or the availability
of skills or resources.
The mechanism through which
they are assessed may vary, but in
many cases it will rely heavily on
eliciting the knowledge of those who
operate and maintain assets and
asset systems. Their insights into
potential service failures, and their
awareness of the scale and frequency
of operational interventions required
to avert them, is rarely amenable
to capturing in models, manuals or
databases.
Accepting that many of the
resilience risks so identified may
36 I APRIL 2017 I WWT I www.wwtonline.co.uk
have significant uncertainty as
to likelihood and precise scale
of impact, water companies will
nevertheless need an effective
decision making framework which
allows them to identify thresholds for
action, what the timescale for action
should be and what is an acceptable
balance of expenditure versus risk
reduction.
Proportionate investment
In the context of water industry service
resilience, rather like the ALARP
approach in health and safety risk
management (where the objective is to
reduce the risk to a level which would
be considered 'as low as reasonably
practicable') investment should not
be disproportionate to the risk it is
seeking to reduce. But there are no
agreed, simple ratios or formulae
which allow 'disproportionate' to be
readily defined.
The judgement as to what is
proportionate must inevitably
incorporate the customers' priorities
and their willingness to accept that
should a future service disruption
arise, the steps tal<en by the company
to reduce their vulnerability to such
disruption had been sufficient both in
terms of scale and timing.
Customers' tolerance of service
disruption is likely to be sensitive to
their perceptions of water company
control or culpability for that
disruption. For example, customers
may be more tolerant of disruption
following widespread power failures
or flooding than they would be if a
similar scale of disruption followed
failure of a poorly monitored or
maintained asset.
The extent to which companies
can elicit or reasonably infer such
complex and subtle preferences from
their customer engagement activities
will be key to the success of any
resilience-driven investment cases.
The aspiration of making water
and wastewater services more
resilient certainly is supported within
the water industry. Those who work in
the industry recognise the importance
of the services which they provide
to the wellbeing and prosperity of
society and understand that they are
stewards of systems which must be
passed on to future generations in
robust health.
The regulatory focus on resilience
will be welcomed by many as an
opportunity to support long-term
thinking in the sector. But we
shouldn't be under any illusions
that achieving that objective whilst
balancing all the other competing
pressures on the industry will be easy.
.,,. About the author. Brendan
McAndrew is a water industry consultant
with 30 years' experience. delivering
client-focused, consultancy services
to UK and international water service
providers.
Hear more about resilience in
a dedicated session at WWT's Water
Industry Asset Management Conference
in Birmingham on May 10th. Details:
events.wwtonline.co.uk/asset