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Welcome to The Executive Exchange, a premier podcast series for on-the-go senior executives. Each episode features short, impactful podcasts where industry leaders share key insights and experiences from the water industry.
[00:00:00] Piers Clark: Welcome to the Exec Exchange 15 minute podcast, in which a leader from the water sector shares a story to inspire, inform, and educate other water sector leaders from around the globe.
[00:00:11] Piers Clark: My name is Piers Clark and my guest today is Alessandro Reginato from Gruppo CAP in northern Italy around Milan.
[00:00:19] Piers Clark: Alessandro, wonderful to have you with us.
[00:00:22] Alessandro Reginato: Hi, Piers. It's a pleasure to stay with you today.
[00:00:24] Piers Clark: Now, we always start with learning a bit about the background of our interviewee. You are the general manager of CAP Evolution. Talk me through what you did to get into that role.
[00:00:37] Alessandro Reginato: I'm a civil engineer. I think I've been very lucky in my career because I participate in many challenging projects all around many country, mainly Spain and South and Central America in the utility world, in the private sector, mainly water and waste management.
[00:00:54] Alessandro Reginato: I started in the early 2000 in Venezuela through a big management contract with the state of Zulia, the region of Maracaibo Lake, to manage the entire water supply of the state. Then I jumped into Dominican Republic implementing food customer services for the east part of San Domingo, including, water meter installation and building system management to improve non-revenue, water and collection. After that I worked in Madrid and then in Peru and Mexico, where I was in charge of water concessions, O&M services for public water companies, in customer services, mainly network maintenance and potable water supply. I've started also to develop waste services in Peru for municipalities. Then I came back in Italy seven years ago and have been working in Milan for Gruppo CAP since then.
[00:01:43] Piers Clark: Alessandro, so that's a wonderful introduction because you name dropped so many countries across central and Latin America as your experience has been there. And that of course is going to be the topic we're gonna be touching on today is getting into your perspective of how different water companies approach their water assets, and what we can learn from that.
[00:02:03] Piers Clark: Now, let's talk a bit about Gruppo CAP. Tell me where are you based, what do you do? How many people do you serve?
[00:02:10] Alessandro Reginato: At Gruppo CAP, we are more than 900 people and we are very proud to serve our territories. Gruppo CAP is the provider of water services in the great metropolitan area of Milan managing 2 million inhabitants, 6,400 kilometers of drinking water networks and other 6,000 of wastewater networks and we operate 40 wastewater treatment plants.
[00:02:34] Alessandro Reginato: We invest more than 100 millions every year renewing infrastructure and revamping our plants to increase the efficiency of our processes. We reduce water risk, energy consumption from one to 1.5% per year. At the same time we invest in innovative processes in plants.
[00:02:53] Piers Clark: Excellent and l Now as I just mentioned, you've got this unique insight having worked not just in Southern Europe, Spain, and Italy, but also across Latin America, both Central and South America.
[00:03:07] Piers Clark: And the topic I think we want to pick into today is the different focuses that you've seen water operators have in these different areas. Let's unpick that. Tell me what's your perspective.
[00:03:20] Alessandro Reginato: Yes, I would like to highlight the different focuses in the management of water services. Drinking water services coverage is still, for example, a priority in many country of South and central America both in the rural and metropolitan areas, especially for the phenomenon of the quick and irregular increase of Yoruba population around the major cities.
[00:03:40] Alessandro Reginato: Behind a fast controversy of the public versus private management, many providers have not become stronger and more industrialized. And as a consequence, we have many gap in water coverage and non-revenue water with a lack of financial resources for the O&M activities, but also for capital expenditure.
[00:04:01] Alessandro Reginato: For example, billing and meter coverage still are big areas of opportunities for public companies. At the same time, these are opportunities for specialized providers to put in place management contracts to improve standards and performance of this kind of entities.
[00:04:17] Alessandro Reginato: On the other side, on the wastewater management, there are many opportunities as well. Landfill disposal of sludge is very common, and the use of anaerobic digestion is very limited. The improvement of collection efficiency may represent, an opportunity to generate resources for technical investments and seek funding.
[00:04:37] Alessandro Reginato: Some of the very big challenges I've observed in some of the more important cities. In Mexico City for example, the biggest challenge is to move the water away during rainfall. We are talking about huge drainage tunnel up to 9 or 10 meters of diameter.
[00:04:52] Alessandro Reginato: On the opposite side, Lima in Peru grows in the desert on the Pacific Coast. Very wet weather in winter, but no rain. No rain means one millimeters per year so you need to water 10 million people in a very arid area.
[00:05:08] Piers Clark: Excellent and let me just go back. Your point I think you made at the beginning was that public water utilities don't have the funding. And I think you said they don't have the culture of driving out things like non-revenue water. Did I hear that correctly?
[00:05:24] Alessandro Reginato: Yes, there is a problem with the physical losses, but also with the administrative losses. Many time I participated in a project for billing and collection just to improve the collection efficiency to generate cash and to finance O&M activities. So there is a big problem of culture also for paying the water.
[00:05:44] Piers Clark: And this is around political will of course because in public utilities in the parts of the world where you've worked, it's governments who control the bills and therefore the water utility executives simply don't have any control over how much income they get to deliver the activities. Correct?
[00:06:02] Alessandro Reginato: Yes. At the end of the day, it's a general lack of regulation. In many countries, there is no national regulation. Let me say in every region, everyone do as better as they can.
[00:06:15] Piers Clark: And when you come to the wastewater side, the argument there is that of course, to put in something like anaerobic digestion to treat your sludges, whilst in the long term it will have a payback because you're generating energy and you are doing better things, you need the capital upfront to better do that. And without governments providing that capital, those schemes can't get underway. Correct?
[00:06:36] Alessandro Reginato: Yes. There are two things on the other side. In Europe, we have better collection standards which allows big investments, but we are not secured in billing activities. Regulation is very standard and there is not much room to innovate. We are not as prepared in managing the billing and customer follow up or customer experience.
[00:06:54] Alessandro Reginato: Billing is often handled by finance department, so we miss opportunities for process improvements. Typical water services know-how, for example, all the technicalities around the AMR and the meter reading in general.
[00:07:08] Alessandro Reginato: But on the other hand, there is a very hard pushing with investments per capita. For example, in Gruppo CAP, we are strengthening all the processes towards circular economy. We inject, into the distribution grid, biomethane for wastewater and we produce fertilizer by sludge. We recover sand from wastewater treatment plants and sewer cleaning, and we reuse it is a end waste products.
[00:07:34] Alessandro Reginato: We are also building a demonstration plant for the production of drinking water as a pilot to show the feasibility of a direct reuse process like the one called the From Toilet to Tap in California for example.
[00:07:47] Alessandro Reginato: So this is the great change I observed when I return from Latin America to Europe. A great focus on resource recovery. We have the BioPiattaforma di Sesto San Giovanni, waste-to-energy and water treatment plants combining this large treatment and the organic waste digestion to produce biomethane, fertilizer, and heat for district heating.
[00:08:09] Alessandro Reginato: One of the latest innovation, for example, Robecco wastewater treatment plants, where we are testing the pyrolysis of dried sludge with the bio-dryers. A process which use bacterias to increase sludge temperature that allows important saving in term of energy and the gas consumption for the drying process.
[00:08:29] Alessandro Reginato: I share with you this experience because one of the last projects I participated in the city of Aratiba included the construction of a wastewater treatment plants with the land feed for sludge instead of recover of material.
[00:08:43] Piers Clark: It’s a different approach, isn't it?
[00:08:44] Alessandro Reginato: Yes. So the innovation is that the entire process of wastewater treatment will not produce waste, but products at the end of the chain thanks to the REACH certification of the biochar at the end of the pyrolysis.
[00:08:57] Alessandro Reginato: Biochar has many uses. One of them is for the extraction of pigments for coloring fabrics, for example.
[00:09:05] Piers Clark: Alessandro, you've given a wonderful story.
[00:09:08] Piers Clark: There are things that people listening to will have gone, oh yeah, I know that, I know a digestion generating biogas. And yes, we clean up the biogas and you inject it into the grid. Yeah, all of that's fine. And then you start moving to pyrolysis and biochar and destructive techniques. And there again, lots of people are beginning to think about those and putting installations. You are doing quite a large scale one that will serve a significant proportion of Milan.
[00:09:32] Piers Clark: And then you just throw in this last one, which I'd never heard of before, the recovery of pigments. Let's do the biochar bit first and then I do want to come to the pigments because it's so fascinating. The biochar plant, help me with the scale of what you're doing and when it will be operating.
[00:09:50] Alessandro Reginato: In Robecco wastewater treatment plant, we produce 7,000 tons of sludge per year. We installed the biodryers. So we reduce at 1,000 tons of dried sludge at 70% of dry matter.
[00:10:07] Alessandro Reginato: Then we have installed a pilot of pyrolysis which treat 500 tons of dried sludge. And it produce, at the end of the day, 100 tons of biochar.
[00:10:19] Alessandro Reginato: We are in a pilot stage with the provisional authorization and now is working, producing waste. But as I said, the provider had the REACH classification. So this product, the biochar, can be commercialized and they commercialized for the pigment extraction.
[00:10:37] Piers Clark: Okay. So the biochar is being used for the pigment extraction?
[00:10:40] Alessandro Reginato: Yes. The amazing thing and that at the end of the process, you don't have waste. You don't produce waste but products.
[00:10:47] Piers Clark: Alessandro, that's a wonderful story about the pigments.
[00:10:50] Piers Clark: Now, you're experienced in Latin America, and now you're in Italy. Can you share with me some of the positive things that you've been able to bring back from your experiences in Latin America that have enabled you to do your job even more effectively in Italy?
[00:11:06] Alessandro Reginato: Yes, I think one of the principle lesson learned is the flexibility and the capability to do many things with not many resources. So here that we have many financial capacity, we can do a lot of innovative projects so we can use correctly our funds.
[00:11:26] Piers Clark: It's a mindset. If you've spent 20 years as you have working in a medium or low income country and having to extend out your resources, you bring that back to when you're working in Italy with that same approach to everything you do during the day.
[00:11:39] Piers Clark: Now Alessandro, unfortunately we're running outta time, but I'd love to take you back 30 years. What advice would you give the young Alessandro just as he was heading off to Latin America?
[00:11:51] Alessandro Reginato: Okay. I would tell him to always do something more beyond the daily task. To break patterns and introduce innovation in their activities oriented towards the circular economy by introducing those aspects of planning and precision rules of the manufacturing industry to the world of resource management.
[00:12:11] Piers Clark: You Have been listening to the Exec Exchange with me Piers Clark, and my guest today has been Alessandro Reginato from Gruppo CAP. You can join us next time. Thank you.