As an established and industry-leading, award-winning and Innovation-driven business, K M Plant specialises in delivering Turnkey Solutions for Construction, Civil Engineering and Utilities, where Buyers are seeking Direct Procurement value within their Supply Chain. K M Plant is a reknown specialist in the Water Industry Utilities sector, and thusly in assisting the Utilities in meeting the desired practical methodologies as sought by Ofwat for PR19 and AMP7 and beyond.
Innovation within the Water industry is more generally driven by evolution than revolution, but companies such as K M Plant, are slowly transforming the Industry and pushing forward highly innovative concepts and methodologies, to create better value for the Utilities, and their Customers.
A substantial element of this is, is achieved by working collaboratively via Direct Procurement arrangement between the Utility Company Client and K M Plant. Parties in between, inevitably means each party has some margin factored in, and that materialises ultimately as extra costs. Procurement Teams actively seek better value, and that's where Turnkey solutions sourced via Direct Procurement comes into play.
Ofwat has indicated four key areas it is seeking the Water Companies to focus their PR19 Business Plans on addressing, essentially these are: Affordability and Value, Customer Service, Resilience and Innovation. Ofwat has confirmed that of these facets, Innovation is potentially the most over-arching, as a mechanism for facilitating the delivery of the other three. Senior Director of Water 2020, David Black, states that Ofwat sees Innovation as essential to enabling the Sector to deliver more of what matters for its Customers, and that Ofwat is keen to incentivise effective Innovation, to realise the potential benefits to Water companies and their Customers. Direct Procurement assists in meeting this objective, by facilitating Water Utilities being able to source direct from highly innovative specialist suppliers like K M Plant.
David Black confirmed that companies with the most innovative and ambitious plans, that can thereby deliver real benefits for Customers and effectively raise the bar for others, will receive an additional return. Ofwat recognise that Innovation will not come from the Water companies alone, and that highly engaged companies such as K M Plant, can drive this Innovation from within the Supply Chain itself, and through Direct Procurement, deliver better value up the line, ultimately to the benefit of the Customer.
Among the stimuli for innovation proferred by Ofwat, will be a price review which breaks with past conventions, rendering the creation of new assets the solution of last resort, rather than the first. This is reflected in an adjusted Weighted Aerage Cost of Capital (WACC) in PR19, that is expected to be at the lowest level since the industry Privatisation occurred, coupled with an anticipated fall in revenues, due to downward pressures on Customer charges, amongst other factors adding likely commercial pressures to AMP7.
K M Plant actively supports Clients in respect of Direct Procurement for Customers ('DPC'), a new Ofwat initiative for PR19. Under the DPC, Water companies are expected to competitively Tender service provisions for discrete, large-scale projects, with an anticipated whole-life total costs ('TOTEX') of in excess £100m.
This differs from current Procurement norms, in that the Tenders are expected to cover more aspects of service, such as Operations and Project Finance. This significant departure from previous conventions, is intended to deliver reduced total costs for larger capital projects, including the cost of operations and related financing, over a potential 15 to 30 year timeframe, which will therefore span numerous Price Review periods. With the Ofwat PR19 determination likely to bring about a reduction in Customer bills, and a lower WACC, going forwards.
K M Plant is a LR WIRS Accredited, WIA WaterSafe, WIAPS, Constructionline Gold, Acclaim, CHAS Premier CAS and Achilles Utilities Services Vendor Data Base Tier 2 Pre-Qualified Utilities Services Provider, with ISO9001 and 14001 accreditations.
Water, Electric and Gas Utilities, Telecommunications Providers, Oil & Gas operators, Renewable Energy providers, Major Tier 1 Construction and Civil Engineering Contractors, etc. can all invite K M Plant to participate in Pre-Qualified Bidding and Tendering activity on their proposed Works and Contracts, engage K M Plant direct, and enjoy cost savings as a result.
To discuss how Turnkey Direct Procurement from an innovative provider like K M Plant can transform your business, contact K M Plant's Commercial Team on 0203 146 8892.
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