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, educate, and inform other water sector leaders from across the globe.
My name is Piers Clark and today my guest is Bob Taylor, chief executive at Portsmouth Water. Brilliant to have you join us. Thank you for taking the time.
[00:00:19] Bob Taylor: It's a pleasure, Piers. Lovely to be on the podcast. I think this is a, this is definitely a first for me. I'm really pleased to be here. Thank you.
[00:00:27] Piers Clark: Let's start with a little bit about your background. How long have you been at Portsmouth Water. What did you do before you joined the company?
[00:00:32] Bob Taylor: Well, I've been at Portsmouth Water since 2018. So that's about six years or so, but I've been in the industry all of my career, which is 40 plus years now. Started out post university in the early 1980s. I applied my trade around the world, not just in the UK. I spent 10 years abroad, mainly in the Middle Eastern Asia regions, but yeah, always a waterman. It sort of, the bug got me from the very early days.
[00:00:58] Piers Clark: Do you miss the travel? Or do you like the local challenge?
[00:01:01] Bob Taylor: Yeah, I do miss it from time to time. I mean, I did do some pretty challenging stuff when I was abroad and I don't kind of miss that side of it really; challenging projects and challenging clients to work with in developing countries particularly. But, I was invited quite recently to speak at a conference in Saudi Arabia. I accepted that invitation and part of the reason was to see whether I still had the buzz for, you know, taking trips like that one, which I did actually. I really enjoyed. It was a great conference and it was great to be in a different sort of sphere of activity, if you like. A different country with very different challenges, but obviously connections with things that we can help them with from a UK perspective, but increasingly things that they can help us with in terms of reuse, desalination, and all those kinds of things.
[00:01:46] Piers Clark: Let's talk now about Portsmouth Water. How big are you, where are you based in the UK? What are the activities that you do?
[00:01:52] Bob Taylor: We're a relatively small water company in the UK context, we provide water to about three quarters of a million people on the sort of central portion of the South Coast in England. I think the city of Portsmouth, people might have heard of that from around the world, because this is the base of our Royal Navy fleet and was quite active in the Second World War, for example. We're a water only company. We're quite unique in the UK in the sense that we have this blend of companies that deal with both water and wastewater; the WASCs as we call them, the water and sewerage companies. We also have quite a number of smaller, generally water only companies, particularly in the southeast.
[00:02:29] Piers Clark: And just to clarify that for any North American listeners in particular, so this is drinking water only. When we call in the UK water only, that's drinking water as opposed to wastewater. And Portsmouth has the lowest drinking water bills in the UK, which is partly because of your efficiency of operations, but also due to some very unique geographic circumstances of where Portsmouth sits. Can you talk a little bit about that?
[00:02:52] Bob Taylor: We sit on top of a large chalk aquifer, which kind of starts in the eastern side of England in East Anglia and snakes its way down to the south coast. In our case, we get all of our water pretty much from that chalk aquifer. So, it's high-quality water. It doesn't require much treatment, which is quite a good advantage to have. But about a third of that water comes out of a large spring field in Havant, which we think is the largest spring field in Europe. It's comprised of about 40 or 50 artesian wells, some of which are on our property, but some of which are dotted around the local town. This is why Havant exists. They say that Havant parchment was used for the Magna Carta, which was something written like 800 years ago. So, yeah, we got quite a lot of history of spring water in Havant. My customers are really quite emotionally connected with it. They think it's almost the stuff you buy in a supermarket bubbling out of the ground, but it's a pretty good quality source. It's a very sustainable source. You've got very reliable records of the yields from the springs going back many years. So even in drought conditions they're pretty resilient. We are also an efficient company, as you said, low charges in the UK context. About 120 pounds a year at the moment is the average total water bill, water only. And the next lowest to that is about 160 or so. We are operationally efficient. We've got some advantages as I've said, but we're also efficient in the way that we spend our capital as well. But that is changing quite rapidly at the moment. We're going to talk about water resources in a minute, but a couple of the interesting things that we're doing, we're building the first major reservoir in the UK for 30 odd years, since privatization in 1989, which is called the Havant Thicket Reservoir. We're also embarking on a universal smart metering program starting next year for all of our customers to get smart meters to help with consumption reduction.
[00:04:43] Piers Clark: Talk about water resources and smart metering and your experiences and the journey you've been on within Portsmouth Water.
[00:04:49] Bob Taylor: I think the water resources challenges are only just starting to be understood by the population of the UK. I think everybody thinks of the UK as being a pretty wet country with lots of rainfall. That's true but, we don't really have the infrastructure to capture that rainfall where we haven't been building many reservoirs and unfortunately the country is characterized by areas of quite heavy rainfall and plentiful water supply and also other areas in the southeast and east of the country where water is quite scarce.
Every five years or so, we are required by law to conduct something called a water resources management plan. We've started doing this on a regional basis now. And these plans are leading to a whole pipeline of major infrastructure development to move water from areas in the UK where its plentiful to the southeast or on the east of the country where it's not so plentiful. So just to give you an idea, the southeast gets about the same amount of water as Jerusalem, and that's about 22 percent of the national average in the UK. We're quite unusual in the southeast compared to our neighbors. We've been a kind of an oasis of plentiful chalk water supply over the last many years, actually. As a result of that, we've only recently been designated as water stressed.
[00:06:08] Piers Clark: This is because when it rains, the water is sort of trickling down to the chalk aquifers, and its sitting as this sort of underground reservoir in the chalk that you're then able to access.
[00:06:17] Bob Taylor: We've [historically] had access to this chalk aquifer, [containing] plentiful, high-quality supplies of water, so we haven't [historically] been designated as water stressed. And the important thing about that is that in the UK, if you want to compulsory meter, in other words, force customers to pay via a meter, which hopefully will encourage water efficiency, you have to be designated as water stressed, and then you also have to put compulsory metering into your water resources management plan for the government to approve it. We've only recently in 2021, received that, kind of accolade, I suppose you would call it of some kind.
[00:06:52] Piers Clark: Well, so now tell me about the smart metering program.
[00:06:55] Bob Taylor: I think the story for us is that it's a big turnaround. So, we're going very, very quickly from an area of plentiful water supply to one where we are using a lot of our waters to support our neighboring companies in the region. We already export about a third of what we produce to our neighboring company, Southern Water. And increasingly because of the fact that we've had plentiful supplies, our customers are the highest per capita water users in the UK or amongst the highest, I would say. So, they typically use about 158- 160 liters per head per day. Our national long-term target in the UK is 110. So, we've got to reduce our customers' per capita consumption by about 40 liters per head per day at least. So that's a big challenge, and we've only got about a third of our household customers on a meter at all at the moment because of the lack of compulsory metering historically.
The narrative is changing very quickly. And I think customers are going to find that a bit difficult to understand because we've never had any restrictions on usage. We've never had any hose pipe bans since 1976. And we only had a hose pipe ban then because our neighbors had one and we wanted to be consistent with the region.
So, we're waiting literally this week, we will get what's called the final determination, which is the outcome of our five- yearly business plan that we submit to our regulators, and that's what defines effectively the challenges for the next five years and the capital programs.
I think all of the water companies in the UK are promoting much larger capital programs, about double that we've had in the last five years. And that's for a number of reasons, including water resources and water resources resilience. And the one thing that's driving this particularly, obviously there's climate change, there's population growth as well, and there's a desire from the government to grow the economy, but the real big impact on all of this at the moment is the desire to restore the natural environment to what it used to be. And the reservoir we're building actually is not for our own use; it is using surplus water from those springs to supply more water to our neighbors, Southern. And this is to enable them to take water out of the two probably most famous chalk streams in the southeast of England: the rivers Test and Itchen. Because under drought conditions, they've been told by our government and the Environment Agency that they won't be able to take any water out of those rivers. They are solving a 200 megaliter a day plumbing problem in the neighboring county of Hampshire and our reservoir is part of that solution. We are also looking at putting a secondary feed of water into that reservoir which is from water recycling- the reuse of water from a large wastewater treatment plant that belongs to Southern and is very close to the spring source in Havant. That makes it a much more powerful solution, probably half of what they're looking for- about 100 out of the 200 megaliters a day.
[00:09:44] Piers Clark: It's fascinating as you paint this picture of how the different water utilities that sit across the south and southern part of the UK are so absolutely dependent on each other and how they need to work together to best manage the resources to serve the population, especially as we have more and more people living in this particular part of the country.
We're recording this just before Christmas, and you're going to find out how the government's responding to your request for the next five years. This broadcast will go out in early 2025, so by the time that it goes out, you'll know whether you're formally accepted. Which is interesting because it leads me quite neatly to my final question, which is, if you could go back and talk to a young Bob Taylor and advise him, would you say, "Do that international stuff. Stick with that. Don't get caught into the regulatory cycle with the UK. Don't even go to the water sector."? What would the advice be you'd give a young Bob Taylor?
[00:10:34] Bob Taylor: Well, I think I would say you've made a very good career choice to start with because, as I said earlier on, there's something that grabs you about water and that's the world over, not just in the UK context. It's a very special and privileged role to play to provide such a life-giving service to the population. I would say definitely, I don't regret one moment, the decision I took to spend 10 years of my career, including with my family as well, in different parts of the world: Kazakhstan, India, China, the Middle East, the Emirates. The ethic is the same around the world, wherever you go. The ways we deal with water supply, they do differ a little bit, but the technologies are broadly similar. The need for different kinds of regulation, it happens in different ways, but it is also broadly similar around the world. I think the ability to exchange views and experience and information and be able to help one another in different locations around the world is really, really, important and has been very satisfying.
I was in Saudi a couple of weeks ago, as mentioned Piers and one of my colleagues there said to me, "Well, you know, if you look back 25, 30 years, the UK and France used to be seen as the centers of expertise in, in the water world. And that was probably true with the long history of private sector involvement in France and then the privatization that happened in the UK. But that doesn't seem to happen today. And that is because other countries around the world have developed their own expertise and knowledge, and now we have the opportunity for things to work in an opposite direction. And I've mentioned desalination. We're looking at water reuse ourselves and that's a really great opportunity to learn from others and import that knowledge to the UK, and export other things like leakage management and so on.
[00:12:16] Piers Clark: Bob, thank you for your time. You've been listening to the Exec Exchange with Piers Clarke. And my guest today has been Bob Taylor- Chief Executive of Portsmouth Water. Hope you can join us next time. Thank you.