Portsmouth Water has submitted a £170 million AMP8 business plan outlining its investment proposals for the upcoming 2025-30 period to water sector regulator Ofwat.

The water company said its AMP8 totex expenditure to c£170 million rising from c£68 million in AMP7 requires a 150% increase in capital for AMP8 and includes £121 million of enhancement expenditure - a significant step up from its forecast enhancement expenditure for the period 2020-25 of £38 million. Of the AMP8 enhancement expenditure, c£115 million is associated with delivering its Water Resources Management Plan (WRMP), Water Industry National Environment Progranmme (WINEP) and eCAF obligations.

The increase compared with AMP7 is driven principally by the significant step up in expenditure relating to the Water Resources Management Plan, which is built around reducing demand through the installation of smart meters and associated supporting systems and behavioural change initiatives.

The AMP8 business plan includes:

• Security resilience and eCAF compliance at operational sites - £15.9 million
• Raw water resilience enhancements (disinfection) - £14.9 million
• Raw water deterioration and drought capacity enhancements - £15.3 million
• Isolation and recovery of service reservoirs - £3.6 million
• WINEP and protecting the environment - £4.5 million
• Reducing customer side demand (universal smart metering) - £65.5 million
• Lead strategy implementation - £2 million
• Total enhancement expenditure - £121.7 million

Portsmouth Water said it will need to enhance its own capabilities and those of its supply chain to deliver the substantially increased AMP8 programme.

However, it added that the increase, whilst significant for the company is relatively small both within the sector and compared to the recent step change increase in capital expenditure that Portsmouth Water has successfully managed, to procure the Havant Thicket Reservoir at a cost of around £325 million. In October 2021, Portsmouth Water was awarded formal planning approval to construct the UK’s first major new reservoir since the 1980s.

The utility said this learning has been used to inform the development and implementation of its approach to delivering the investment programme for AMP8 and beyond. The water company has started development of a central Programme Management Office (PMO) to manage the planning and delivery of the AMP8 investment plan.

At the time of planning approval, Portsmouth Water had only two in-house members of staff working on the project: its Chief Executive Officer and its Communications and Engagement Lead. Since then, the team has grown exponentially and has also awarded the two main contracts for both the construction of the reservoir and associated pipeline. Today Portsmouth Water employs a team of around thirty full time members staff on the project and has mobilised a wider workforce of over one hundred people.

Looking to AMP8, the firm says it will need to increase its internal resource capacity marginally to support solution development and will also utilise its Framework Consultancy supply partner to provide specialist skills and to manage peak workloads,

The plan also includes significant upgrade of its site based Operational Technology, new treatment process at several key sites and installations, and refurbishment of existing treatment processes at several key sites. This will require an increased construction management and commissioning capability and capacity.

Portsmouth Water are highlighting that it is important to reflect that the enhanced level of capex is not a single AMP cycle requirement. The Long-Term Delivery Strategy requires a similar level of capex in AMP9.