Water Journal : Water Journal December 2013
DECEMBER 2013 WATER 35 Feature Article • Piloting initiatives in operation for development of work process design and demonstration of effectiveness; • Effecting organisational structural changes; • Codi cation and roll-out of programs across geographies and divisions; and • Embedding these processes and methods to be adopted into the utility's management systems and behaviours through technical and managerial training and formal skills development. The impact achieved is measured through veri cation of the bene ts in terms of savings realised, revenue generated, or other non- nancial performance outcomes that are measured and tracked during the program. As well as the technical and operational solutions, successful change must address the human element by ensuring a supportive and enabling organisational culture while also developing the capabilities of staff and strengthening the management infrastructure and leadership performance. In this way, the PPS model combines operational changes with the development of the appropriate capabilities and mindsets and the necessary management infrastructure to deliver sustainable operational excellence and create real and veri ed value for the DEP. In the case of New York, Veolia was appointed by the NYCDEP in 2011 and completed the rst phase by by June 2012. The proposed program of work presented to the NYCDEP (NYCDEP, 2012) was adopted for implementation through until June 2016. The total expected annual bene t to the City of New York is forecast at between US$108 and US$130 million, representing between 9% and 10.8% of the total operating budget. Key areas of scope are procurement, metering and revenue management, energy ef ciency, chemical usage, labour ef ciency, maintenance planning and optimisation, wastewater treatment process optimisation, eld operations, and central functions. For New York City's speci c situation, the most valuable levers for impact are labour productivity and improvements in revenue management from large diameter water meter accounts. Substantial success has also been found in optimising WWTP process performance (achieving energy and chemical use savings, improved sludge processes and reduced disposal or reuse cost). And a focus on the central functions, in particular procurement and IT, is also proving to be very effective in achieving impact in the form of direct expenditure savings. At the time of writing, in November 2013, the program is on schedule, having reached the target of 30% implemented by the end of the City's scal year 2013, and is expected to surpass 50% achievement by the end of the calendar year 2013. Thus the NYCDEP experience is achieving the goal of demonstrating the value generation and performance improvement achievable under the PPS model of PPP, without compromising operational or regulatory compliance. The unique combination of private sector expertise and management excellence, brought into the utility's operations (rather than through outsourcing), will generate sustainable improvements in cost and performance, and leave a lasting legacy of cultural change and enhanced management and leadership capability that serves the DEP and the city of New York well beyond the term of the contract. The program represents a developing new model of PPP that leverages global access to the expertise, systems and tools of the private sector, while also building capability and transforming culture to enable utilities to achieve marked improvements in performance. It is a model that is gaining prevalence in the US water market and is potentially aplicable to use throughout the world. WJ ACKNOWLEDGEMENT The Author wishes to acknowledge the support and cooperation of the executive members of the New York City Department of Environmental Protection, the employees of the NYCDEP and the City of New York. REFERENCE NYCDEP (2012): NYSDEP Operational Excellence: Phase 1 Report to the Water Board, June 2012. Prepared for the New York City Department of Environmental Protection and the Water Board by Veolia Water (available online). THE AUTHOR Rod Naylor (email: rod.naylor@ veoliawaterna.com) is the General Manager responsible for Veolia Water's role in the OpX contract with the Department of Environmental Protection in New York, and is also responsible for managing all of Veolia's PPS contracts in North America. Until 2013, Rod was Executive Director, Veolia Water Australia and New Zealand, having held the positions of Chief Operating Of cer and General Manager Operations there. Rod started his career with the Hunter Water Corporation over 25 years ago, and spent a period consulting in the UK before joining Veolia. He holds an honours degree in Chemical Engineering and a Master's Degree in Business Administration. Analysis and status of agreed bene ts at completion of Phase 1. Manhattan Bridge by night.
Water Journal November 2013
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