View From: GWI Global Water Summit 2017, Madrid
The annual get-together of water business executives and municipal leaders from around the globe was suffused with conversation about change in Madrid 2017.
Whether fragility engendered by climate change, technology-driven disruptions to conventional business practice, or the landscape-changing buyout of GE Water, a preoccupation with transition was in the air.
Digital transformation was perhaps the biggest theme, as municipalities and water companies get to grips with the challenges and opportunities that digital is bringing.
Water Corporation of Western Australia chief executive Sue Murphy spoke of how her agency has used digital communications to improve the quality of customer conversations, and to encourage water conservation. In some cases, Water Corporation customers have become advocates for saving water, a development that Murphy rightly celebrates.
Digital monitoring technology is already a big part of how water businesses are changing, and largely represents an opportunity for water companies and their customers. The flip side — technology-driven changes to workforce requirements — is more equivocal: Keynote speaker, the author Martin Ford believes that many blue and white collar jobs in all industries will be replaced over time by automation, and that fewer paying jobs overall will become the new reality. The workforce transition that represents is potentially huge for water companies.
Constraints on budgets and limited sources of investment for water projects, particularly in, but not restricted to the developing economies, are not exactly new, but they continue to demand an ongoing shift in mindset by global water players. A new model for water projects that emphasises social contract, local design, decentralisation, spreading costs (including through use of micro-credit), and cost-saving innovations was articulated by Global Water Development Partners chief executive Usha Rao-Monari.
An exciting build, operate, transfer (BOT) project for new desalination capacity in Mombasa County, Kenya, was presented by minister for water and natural resources, Fatma Awale. The World Bank is supporting improvements to water and sanitation services in Mombasa County through its $200 million Kenya Coastal Water Security and Climate Resilience Program; the desalination project will be financed separately, through a public-private partnership (PPP). This was among the many positive stories of projects moving ahead, establishing the right funding mechanisms, finding the best-suited partners.
The implications of the big, industry-shifting buyout of GE Water are only just beginning to come into focus. Certain competitors are eyeing the tie-up as an opportunity, seeing it as potentially one less player in the bidding for projects. How the business is to be run will likely become clearer over the summer months 2017.
GE Water chief executive Heiner Markhoff wasn’t giving much away in his talk at the summit’s CEO forum. A subtle piece of positioning, perhaps, but Markhoff's reference to the “joint venture” of Suez and its buyout partner, Canadian pension fund Caisse de dépôt et placement du Québec, was a reminder to the assembled delegates of the clout that GE Water still has.