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Delivery of Environmental Infrastructure in lean times

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More bang for less bucks

  1. 1. . “MORE BANG FOR LESS BUCKS” (The challenge of delivering environmental outcomes in leaner times) J. Dara Lynott B.E., MSc, PE, C.Eng., FIEI Office of Environmental Enforcement Environmental Protection Agency I. INTRODUCTION These are indeed challenging times for everyone when job security and meeting our financial commitments are to the forefront in everyone’s mind. Ireland’s fortunes have taken a hard hit harder with our Budget balance as a % of GDP forecast to reach a deficit of –5.5% in 2009 from a 2% surplus in 20061. In this financial climate our ability to deliver environmental outcomes will be severely tested particularly in the area of water quality as it is so dependent on the provision of new and upgraded infrastructure that is expensive to provide and requires long lead-in times to execute. Environmental outcomes can at the best of times be difficult to define, as they require multiple interventions by a significant number of stakeholders and can be difficult to measure. However; failure to achieve these outcomes carries the risk of significant penalties imposed by environmental regulators and ultimately the European Commission. The challenges2 in the area of water quality can be summarised as follows: • 30% of river channel, 10% of lake area and 22% of estuarine and coastal waters are not satisfactory • Loss of high status water quality sites • Contamination of groundwaters across the country, particularly in the southeast, • Poor quality of drinking water resources • Poor water conservation • Significant Inputs of phosphorus and nitrogen surface waters above background levels from municipal sewage discharges and losses from agricultural activities. • Lack urban wastewater treatment for all inland receiving waters • insufficient or delayed infrastructure The following paper sets out a number of issues that that we have to consider if we are to tackle the water quality challenges set out above. To deal with these issues will require a resource of one kind or another, but as we allocate the decreasing resources available to us there will be increasing pressure on us to make sure that the decisions we take are the right ones. This is particularly relevant given that the current water services investment programme 2007-2009 draws to a close this year and a new programme is being drafted for the next 3-year period. 1 European Commission, Directorate-General for Economic and Financial Affairs, Economic Forecast Autumn 2008 2 EPA (2008) Ireland’s Environment 2008. Environmental Protection Agency, Johnstown Castle, Co. Wexford. 1
  2. 2. . II. THE INFRASTRUCTURAL DEFICIT In 2009 the National Competiveness Council stated in its annual competitiveness report that the level of infrastructure in the Country affects our competitiveness, the Country’s attractiveness as an investment location and the general quality of life3. The environmental infrastructure deficit in Ireland is acute with 37% 4 of our slightly to moderately polluted river channels attributable to pollution from municipal sources and 53% of our seriously polluted river channels attributable to the same sources. E. coli contaminates a significant number of drinking water supplies5 and 56% of our wastewater treatment plants are non-compliant with the Urban Waste Water Treatment Plant Directive requirements6. When the EPA published7 its Remedial Action List (RAL) in 2008 for Drinking water supplies it requested local authorities to assess the risk associated with 339 drinking water supplies on the RAL. The results of that assessment indicated that 63% 8 of the supplies needed to be upgraded to eliminate the risk to health associated with the supply. With so much to do the question is where do you start?. In recent reports the EPA has emphasised the need for risk-based approaches; the RAL being the result of one such risk-based approach. Drinking Water supplies were placed on the list as a result of a previous contamination event, an EPA audit finding, the lack of treatment barriers to Cryptosporidium or advice from the HSE. To fully characterise all the risks associated with a supply the EPA has adopted the World Health Organisation approach for a safe and secure drinking water supply. The approach requires that the health or environmental risk is assessed for each drinking water supply source, its treatment plant and distribution network so that these risks can then be managed. In the case of drinking water this means prioritising infrastructural spend on the 57 supplies that have identified to have inadequate treatment barriers to cryptosporidium by upgrading or replacing them then concentrating on the other supplies on the RAL. In the case of wastewater treatment plants it means targeting the 112 locations without treatment and the 28 locations that have no secondary treatment that are currently discharging into contaminated bathing waters, nutrient sensitive rivers and lakes, upstream of drinking water abstractions and sensitive habitats such as pearl mussel habitats. The EPA’s Office of Environmental Enforcement (OEE) is developing this risked-based enforcement methodology further as additional data comes to light. The National Competiveness Council echoed this type of approach when they recommended the prioritisation of key projects, and parts of projects, to enhance our competitiveness and resolve infrastructural deficits9. How our taxes are spent will come under significant focus, as the financial climate remains weak. The setting of national environmental infrastructural priorities on the basis of environmental or health risk will have to become the norm whether in wastewater treatment, drinking water or waste if we are to protect the public health as well as its purse. The new water services investment programme 2010-2013 offers the opportunity to rank the priorities on the basis of risk and align this ranking with the available monies for investment. Prioritise Infrastructural Spend On The Basis Of Environmental Or Health Risk. 3 NCC (2009) Annual Competiveness Report 2008, Volume 1: Benchmarking Ireland’s Performance P90 4 EPA (2008) Ireland’s Environment 2008. Environmental Protection Agency, Johnstown Castle, Co. Wexford. P94 5 EPA (2009) The Provision and Supply of Drinking water 2007/2008. Environmental Protection Agency, Johnstown Castle, Co. Wexford. P5 6 EPA (2009) Urban wastewater discharges in Ireland : A report for the years 2006 and 2007. Environmental Protection Agency, Johnstown Castle, Co. Wexford. 7,24320,en.html 8 EPA (2009) The Provision and Supply of Drinking water 2007/2008. Environmental Protection Agency, Johnstown Castle, Co. Wexford. P8 9 NCC (2009) Annual Competiveness Report 2008, Volume 2: Ireland’s competitiveness challenge P90 2
  3. 3. . III. POLLUTER PAYS In their 2006 report10 NESC stated that: “where there are adverse environmental effects from economic activity, a system of markets will not maximise social welfare. This is because individual firms (or other actors) will not take adequate account of the costs of pollution where these costs do not fall directly on them. The effect of these ‘externalities’ is that there is more pollution than society’s preferences really want. Overall welfare can be increased by government policies that alter the allocation of resources in a way that reflects the value people place on the environment. This creates a complex distribution of costs and benefits for resource owners, firms and households.” It is worth noting that the Commission on Taxation established in 2008 is currently assessing how the Government should alter the allocation of resources and will consider and make recommendations on options for the future financing of local government. Any decision by the Government on how to “alter the allocation of Resources” will no doubt be informed by the results of previous studies in this area. In 2005 the Indecon11 Review of Local Government Financing commissioned by the Department of Environment Heritage and Local Government recommended that there should be a significant increase in the level of resources available to local authorities over the period to 2010. Their estimates suggested that, based on current policies, there would be a funding gap of between €415 to €1,500m if levels of service provision were to be maintained. They also recommended that there should be a significant change in the system of local government financing, with a move towards more locally-based sources of funding. One of the principle reasons for these recommendations was to affect a radical realignment between the cost of providing services and the demand for such services. The report went on to say that where the commercial sector is charged for services and the domestic sector gets the same services free of charge it leads to “over consumption and to unnecessary expenditure. There is potential for significant expenditure efficiencies if users were faced with meeting the full economic cost of these services. This is the most important issue facing the task of ensuring efficiency in water supply”12. In a 2008 study Forfas 13 determined that the average combined charge for water and wastewater services in Ireland’s gateways and hubs was €2.03 per m3 and €1.67 per m3 in the largest five Irish cities. This compares with €3.24 per m3 in Europe. The report went on to state that “the full cost of providing water services for domestic users needs to be clearly identified. Having established the cost of delivering water services to domestic users, an analysis of the merits of retaining the current EU derogation on domestic water charges needs to be undertaken to determine how best to fund water provision between user and Exchequer sources.” Similar sentiments of polluter pays were expressed by Mr Michael Hamell of EU DG Environment at a recent conference hosted by Teagasc14 when we outlined the CAP Health check proposal by the Commission to emphasise, what he termed, significant modulation of funding with increased 10 National Economic and Social Council –Strategy 2006: people, productivity and purpose. P106 11 DOEHLG Review of Local Government Financing in October 2005, Indecon P193 12 DOEHLG Review of Local Government Financing in October 2005, Indecon P150 13 Assessment of Water and Waste Water Services for Enterprise - 02 September 2008 -Forfás 14 Sustainable grassland systems in Europe and the EU Water Framwork Directive - Michael Hamell EU DG-Env – Teagasc Conference November 2008 3
  4. 4. . concentration on water and biodiversity protection, climate change and renewable energy. Dr. John Curtis of the EPA echoed this approach when he suggested 15 that we should subsidise good environmental behaviours and levy those behaviours that need to be discouraged. The effects of such approached were outlined in the following graphs prepared recently by the European Environment Agency16. . Subsidise Good Environmental Behaviours And Levy The Behaviours That Need To Be Discouraged. IV. WASTE NOT WANT NOT The EEA 17 published a leagues table of the estimated % leakage of drinking water from Drinking water supplies, which is replicated below. I am assuming that 2000 data referred from Ireland came from the national water study was completed by WS Atkins Ireland18 in 2000. As part of that study a water audit was undertaken to establish levels of unaccounted for water (UFW) within each scheme from existing information. The poor quality of data and the low level of consumer metering meant that at best the figures were indicative of the effectiveness of the scheme management. 15 Hitting the Targets for biodegradable Waste – ten options for change, John Curtis, Strategic Policy Unit, EPA, January 2008 16 EEA Report No 2/2009 Water resources across Europe — confronting water scarcity and drought 17 EEA Report No 2/2009 Water resources across Europe — confronting water scarcity and drought 18 WS Atkins Ireland National Water Study RK2370/DG/712/100 March 2000 National Report: Volume 1 4
  5. 5. . In summary the results from the Atkins study are as detailed in the following table. Scheme Type Mean UFW % Mean UFW (l/conn/hr) Mean UFW (m3/km/day) All 47.4 34.4 29.3 Urban 44.1 30.4 38.5 Mixed Urban/Rural 48.4 34.6 31.5 Rural 50.4 37.3 23.6 The Atkins report determined that leakage rates in excess of 25-30% were unjustified as they indicate that schemes are not being well managed. This is a significant issue if we are to make the correct decisions on Expenditure. Our failure to deal with the significant level of Drinking water leakage from our distribution networks means: • That we are reaching full capacity at drinking water plant earlier than anticipated • That quality of water treated is at risk as treatment units are operating above there design throughput rates and additional treatment units are necessary to counteract the risk. • That water is not available for future uses of benefit to the economy. • Failure to deal with the leakage issue leads to unnecessary expenditure elsewhere. The Atkins report stated that: “it is difficult to justify grants for significant capital projects to increase water supplies when 70-75% of the product cannot be accounted for”. Replacing old distribution networks to conserve water also has the double benefit of replacing lead pipe still in use. While leak detection and repair are a key conservation measure the EPA has been involved in a number of programmes to increase awareness and delver outcomes in water conservation these include:;; 5
  6. 6. . The green Hospitality awards for example has saved over 280,000 tonnes of water among only 100 hotels surveyed (over 240 hotels are now in the scheme). Through the Local Authority Prevention Demonstration scheme guidance for many groups from publicans to farmers have been developed on water conservation (now a cost for both). Discussions with the HSE on water conservation in hospital are also in progress. The challenges for the mangers of local authority water supplies is to link these initiatives together and engage the entire community in an effort to save costs, maximise effective use of our infrastructure and deliver outcomes for the environment and the health of the community. Fix Leaks And Conserve Water V. COMPETENCY The EPA carried out 56 audits19 of water treatment plants during the period January to September 2008. The majority of audits were carried out on supplies where notifications were received or supplies on the Remedial Action List. The key issues identified by the EPA from audits carried out in 2008 are: Issues Identified No. of Water % of Supplies Supplies Audited 1 Problems in the operation of the filters 18 67 Reason: Poor filtration indicates inadequate treatment of the water which may result in contaminants not being removed. 2 No turbidity monitors on each filter 22 65 Reason: Turbidity monitors are critical to control the quality of treated water post filtration. 3 Inadequate chemical dosing arrangements 29 52 Reason: Failure to dose correctly will result in excessive chemicals in treated water or inadequately treated water. 4 No chlorine monitor and alarm 28 50 Reason: Chlorine monitors and alarms alert the operator of the plant to inadequate treatment of the supply even when the plant is unattended. 5 Floc carryover from the clarifier 10 48 Reason: Floc carryover indicates poor control over chemical dosing and may result in excessive chemicals in treated water or inadequate treatment of water. 6 No source-protection measures in place 25 45 Reason: Potential sources of pollution could be present to contaminate the supply. 7 Final water turbidity >1.0 NTU7 13 45 Reason: Excessive levels of turbidity indicate that if Cryptosporidium is present in the source water it is likely to be in 19 EPA (2009) The Provision and Supply of Drinking water 2007/2008. Environmental Protection Agency, Johnstown Castle, Co. Wexford. P11 6
  7. 7. . the treated water and may pose a risk to human health. 8 No duty and standby chlorine pumps 19 34 Reason: If a pump fails undisinfected water may enter the water supply and pose a risk to human health. As the EPA assumes an enforcement role at wastewater treatment plants it is anticipated that similar issues relating to the competency of operation of environmental infrastructure will arise. As facilities are upgraded to meet the requirements of European Directives, so too will the qualifications and experience of operators have to increase in order to effectively manage facilities of greater size and complexity. Operators of drinking water plants are in the business of producing a food source and protecting public health; as treatment technologies advance, all drinking water operators, as a minimum, will have to undergo appropriate training for each treatment process that they are required to operate at the plant. In May 2000 when Justice O Connor investigated the circumstances surrounding the contamination of the drinking water supply with E. coli in Walkerton, Canada he made a number of interesting observations. This contamination event resulted in 7 deaths and 2,300 people being ill. He stated that ”Improvements will continue to rely on better scientific understanding and technology, but these accounts also reveal the importance of the human element in assuring safe drinking water…..Ultimately the safety of drinking water is protected by effective management systems and operating practices, run by skilled and well trained staff”. In other jurisdictions20 operators of wastewater treatment plants are trained and licensed to particular grades which depending on the grade entitle them to operate particular types of processes or facilities. The training involves topics such as: • Activated sludge systems and microbiology; • Hydraulics and operation of pumps, basic electricity and instrumentation; • WWTP management (financial and regulatory) and • Lab management, solids handling, effluent disposal Exams are set for each grade. In Ireland many courses are delivered by the Water Services National Training Group Given the challenges that lie ahead the time is right for a certification and examination system for operators of environmental infrastructure to ensure its effective and efficient operation. More importantly we need to make the transition from the passive term of caretakers to the proactive term of protectors of the environment. Institute a certification process for operators of environmental infrastructure. VI. BETTER REGULATION The last five years has seen a significant increase in the amount of environmental regulation. This is particularly true in the area of water regulation. This regulation has been largely driven by Europe in response to Directives on the Water Framework, Nitrates, Dangerous substances, habitats, shellfish, groundwater, drinking water, and bathing water. The trend is set to continue with revisions to this legislation and the addition of new legislation in water abstraction, septic tank systems and tighter 20 7
  8. 8. . planning controls. However, as these Directives are transposed into national regulations that subsequently result in action plans by many authorities, coordinated effort becomes very difficult. A recent guidance note for river basin management plans put it succinctly “Different plans and strategies have different planning cycles, most of which will not be synchronised with the river basin planning timetable. Similarly, different plans and strategies operate to different geographical boundaries, most of which will not fit with the river basin district boundaries.”21 The types of plans referred to have to do with planning, natura sites and drinking water safety. In addition there are pollution prevention plans for nitrates, surface water, groundwater and shell fish; and also management plans for flooding, sludge, emergencies and forestry. This number of plans leads to duplication and inefficient service delivery. The European Council in March 2007 set a target to reduce the administrative burdens arising from EU legislation by 25 percent by 2012 and invited Member States to set their own national targets of comparable ambition by 2008. European Commission estimates suggest a possible benefit to Ireland’s GDP of between €1.5 billion and €2.1 billion based on the assumption of adopting a 25 percent reduction target22. A number of key messages emerged during a review23 of the international experience of measuring and reducing administrative burdens: • There can be significant potential for reducing administrative burdens without compromising the integrity of regulation; • Benefits accrue to business from a reduction in administrative burdens and to the public sector from increased process efficiency; In Ireland there is a significant case to be made for streamlining the requirement of legislation associated with protecting the aquatic environment. A Water Protection Act consolidating the sampling, enforcement and reporting requirements governing water protection would allow the regulated community to have a clear understanding of what is expected of them and allow regulators to plan their resources in an integrated, efficient and effective manner. Consolidate regulation to minimise duplication and reporting requirements. VII. ENVIRONMENTAL GOVERNANCE Any discussion on Environmental Governance has to be set against some of the conclusions of the OECD review of the public service that indicated that absolute numbers in the public service are still modest by international standards24. However it is very clear that the construct of the Water Framework directive and its reliance on the river basin and the basic unit of measurement requires interventions from many bodies whose authority does not cover the entire river basin area. Achieving greater integration that is capable of maximizing value for the taxpayers’ money was central to many of the reforms identified by the OECD’s review of the public service25, including: 21 DEHLG (2008) - River Basin Management planning guidance River Basin Management planning guidance 22 Measuring administrative costs and reducing administrative burdens in the European Union, European Commission, November 2006. 23 Report Of The Business Regulation Forum – March 2007 24 Core public administration, excluding doctor and teachers. Source: OECD, 2008, “Employment in Government in the Perspective of the Production Costs of Goods and Services in the Public Domain,” in Public Employment and Management Working Party GOV/PGC/PEM(2008)1, 28 January, Paris: OECD, Figure 15. 25 OECD, 2008, Ireland: Towards an Integrated Public Service, Paris. 8
  9. 9. . • Coordinating inefficient or fragmented public services at a national level as some public services (e.g. waste management, water services), local authority or administrative boundaries are not best suited to providing an integrated service or to exploiting economies of scale; • Improved coordination is needed between departments and agencies on cross-cutting issues; • Greater use of networks are needed to bring together relevant players from across the public service; • Performance measures need to look at outcomes rather than inputs and compliance with processes. • Budget frameworks should facilitate prioritisation and reallocation of spending; The Indecon26 report into Local Government financing came to similar conclusions when it stated that: “Given the various directives in respect of water quality, and consumers’ expectations, the product being delivered is increasingly standardised: there is not much scope for local discretion or variety. This suggests that regional bodies organised on the same basis as waste management or a national body could have responsibility for these services as the benefits of economies of scale outweigh the benefits of the service being provided locally. In other words, they could be delivered on the same basis as gas or electricity through a national entity with regional/local networks. At present, there are a large number of bodies involved in this service, each with its own administrative and engineering capacity. This may be leading to higher administration costs and a failure to maximise economies of scale.” In the 2008 assessment27 by Forfas of water services for enterprise they indicated that a move to a river basin district basis of provision of water services to maximise potential economies of scale, both in the building of infrastructure and the operation and delivery of services. The Chief Executive of Forfás Martin Cronin stated that “Moving to a river basin district provision of services would maximise the potential for economies of scale and enable greater strategic planning and prioritisation of capital investment projects” In a later report on the main infrastructure issues in Ireland, Forfás stated that there was a need for local authorities, county councils and relevant stakeholders to take a regional view, rather than a county level view, to developing the potential of the regions28. Forfás recommended that the delivery of local authority services on the most cost effective geographic basis either on a shared basis or by tendering services on a national or regional basis. The authors recognized that to achieve the economies of scale, the delivery system is not in many cases be aligned with current local authority structures. The river basin district is the basic unit to implement the Water framework Directive. The work to date in this area has been organised and delivered on this basis with lead authorities interacting with all the authorities in the catchment area, stakeholders, the consultants employed and the Environmental Protection Agency. However without the continued delivery of infrastructure in these leaner economic times the work completed to date will not be built upon to attain the demanding targets for water quality demanded by law. Without a stable regional management structure to implement the required programme of measures and deliver the must-needed infrastructure, the outcomes will continue to depend on each Local Authority to do the best they can within the resources available to them. These resources will be dependent on the financial health of the individual local authorities and will run the risk of duplication of resources in the 26 DOEHLG Review of Local Government Financing in October 2005, Indecon P152 27 Assessment of Water and Waste Water Services for Enterprise - 02 September 2008 -Forfás 28 Overview of the Main Infrastructure Issues for Enterprise 28 May 2008 - Forfas 9
  10. 10. . areas of inspection, analysis, reporting, and infrastructure. If everyone is responsible for the achievement of the targets then quiet often nobody feels a unique responsibility to achieve the desired outcome. Develop regional management structures to implement the requirements of the Water framework Directive, maximise shared services and deliver infrastructure. VII. CONCLUSIONS Ireland is facing into a challenging period in our history as the economic forecast is deteriorating rapidly. However there is no relaxation in sight of our commitments under EU and National legislation to achieve the required environmental standards. We are spending and will continue to spend significant sums of money on infrastructure in this Ireland; however, how we spend that money and on what will rightly come under increasing scrutiny. As the water services investment programme for the period 2010-2012 is finalised, investment decisions will have to be made. This paper concludes that the following points need to be considered in making these investment decisions: 1 - Prioritise infrastructural spend on the basis of environmental or health risk. 2 – Subsidise good environmental behaviours and levy those behaviours that need to be discouraged 3 – Fix leaks and conserve water 4 – Require certification process for operators of environmental infrastructure 5 – Consolidate water regulation to minimise duplication and reporting requirements. 6 – Develop regional management structures to implement the requirements of the Water Framework Directive and maximise shared services and deliver infrastructure. Action on these points may make the challenge of delivering outcomes for the environment in a climate of reduced resources a little easier. 10