Water - Delivery Assurance Group (DAG) report: quarter 3 - 2022 to 2023

9. Conclusion

The DAG is invited to note that:

• At the end of Q3 2022/23 of the new regulatory period Tier 2 Investment was £511m made up of planned repair and refurbishment (£316m), enhancement (including flooding) (£134m) and growth (£60m).
• Tier 2 investment was £24m above the central forecast for Q3 (£487m) and we are forecasting that we should be at the top end of our Delivery plan range of £620m to £690m at year end.
• Scottish Water's overall IPOD position at 484 points is behind track against the forecast dates in the Committed List but is forecast to be back on track by Q4 2022/23.
• In relation to the milestones measured under IPOD, performance on achieving the Start on Site has been good. Scottish Water are experiencing delay in achieving Acceptance on a number of Water and Wastewater projects as delivery risks are realised: -
  • 28 projects in the Wastewater programme have had their acceptance date reforecast.
  • 30 projects on the Water programme have had their acceptance date reforecast.
• Reforecasts are broadly due to scope variations; third party risks; construction risks and challenging construction market conditions. Weather in December also had an impact. Where appropriate and if necessary, temporary mitigation is put in place to maintain service. In addition, learning is being taken for new additions to the committed list whilst maintaining the aim of setting realistic but challenging forecasts. This is in keeping with the principles of the new IPPF framework under which Scottish Water look to set forecasts, monitor variances and take on board learnings. These delays are having a subsequent knock-on effect to Gate 110 Financial Completion particularly in the Wastewater programme which is outwith the range at Q3 but forecast to recover at year end.
• First draft of output reporting on Committed projects is included in this report as for discussion.