Joining forces: why collaboration is key to transition within the water sector

Water Security is an issue facing water organisations across Australia, but one leading strategy expert says that – in the Victorian context – finding and pursuing opportunities to work together to overcome hurdles is key to achieving a sustainable water future. 

Sequana Strategy, Transformation and Delivery Director Melissa Thek said the Victorian water sector is uniquely positioned in Australia as it has the highest number of independent water authorities, all positioned within different communities, with similar challenges to overcome. 

“In Victoria, we have 18 water businesses, all with several similar operational requirements in terms of innovation and technology, regulatory compliance, infrastructure maintenance, and environmental management. These water organisations are all facing similar challenges related to water security,” she said. 

 “For instance, some rural water corporations need to strategically manage delivery assets as irrigation demand decreases. This contrasts with urban areas, where water organisations are striving to keep pace with growth and ensure sufficient water security to meet increasing demands. 

 “The increased demand for water from population growth, industrial expansion and climate change here in Victoria is a big challenge. We have a real need for sustainable water practices considering rapid urbanisation and the environmental concerns that have emerged.” 

Meeting increasing demand for water, mitigating climate change and progressing on decarbonisation are issues being managed at the same time as the need for new infrastructure and technological advancements, plus there’s the pressure of when and where to invest. 

“Cybersecurity has become prevalent across our industry in recent times, and with new features such as AI, predictive maintenance and predictive learning, these factors are making it difficult for water businesses to know where to invest in emerging technology,” Thek said. 

“There are also risks associated with delays in projects. This issue is heightened by another challenge – competing for niche expertise. In the capital investment space in Victoria, we are struggling to secure core critical skills such as engineers and project managers. 

“Securing talent is really problematic and the costs associated with outsourcing for core operational activities that, in the past have been recruited and managed internally, has been a necessity for some businesses to enable them to continue to deliver.” 

Central to all of this is the need for collaboration, Thek said, while collaboration within the sector is commendable, procurement and resourcing efforts are still often carried out independently, leading to inefficiencies and missed opportunities. 

“While Boards are ultimately accountable, given the current climate, we need to encourage them to embrace a creative approach in order to advance. Unlike the other states, where a few major players dominate, in Victoria, we must be willing to take risks and collaborate for mutual benefit to achieve our goals effectively," she said. 

“We all have work that is unique and service different communities – but there is definitely a portion of work that is shared by all of us. 

“The water sector is collaborative, and work is being done to seize opportunities, but there is room to be more deliberate and targeted in our collaboration for the benefit of everyone. Once we demonstrate some of these strengthened outcomes, the rest will follow suit.” 

 In the same boat   

Opportunities to collaborate to achieve efficiencies within the Victorian water sector abound, Thek said, with areas of administrative and strategic overlap around every corner. 

"We are all engaged in similar activities across various areas, such as compliance, regulation, and exploring the benefits of emerging technologies and energy optimisation opportunities. Acknowledging the ongoing efforts of associations and networks, which play a pivotal role in fostering collaboration, cooperation and progress within the industry, we need to recognise that we are still working individually and bearing the costs of many activities on our own,” Thek said. 

“In many cases, the Victorian water authorities are duplicating efforts across 18 different organisations. If we strategically and deliberately collaborated, we could achieve significant benefits.” 

Thek said the sector collaborates exceptionally well on some levels, with knowledge and information sharing being a strong suit, including proactive relationship building and a great generosity with sharing IP across utilities. 

“Everyone is doing an excellent job of sharing information and, while some Victorian water corporations have engaged in several collaborative efforts to enhance the sector's efficiency, sustainability and resilience, there is still room for assessing the level of cooperation and desired outcomes,” she said.  

“The disparities in investment in collaborative initiatives highlights the importance of a unified effort across the sector. For example, when it comes to doing challenging things like collaborating on joint finance systems or procurement models, there is hesitation. Sometimes this is because capital investment planning or pathways are not perfectly aligned.  

“This repeated cost burden is also evident in the Research & Development (R&D) space. To fully accelerate the benefits of this work, we must continue to evolve and ensure more consistent and effective collaboration across all networks.” 

Capital investment 

One of the biggest barriers to deeper and more beneficial collaboration lies within the general reluctance to commit financially, Thek said, despite the incredible savings that could be made with the right capital investment strategies. 

“Knowing when to invest is a challenge. Victoria has ageing infrastructure across a number of its water businesses. This has been driven by water companies maximising the utilisation and efficiency of existing assets before investing in new ones – also known as "sweating assets" – as part of their strategy to keep costs and bills low,” she said. 

“But with climate change, we are getting these 1-in-100-year events that knock out our ageing infrastructure. In these scenarios, the plan to sweat the asset goes out the window, as the infrastructure affected is more susceptible to damage from the intense floodwaters and needs to be replaced as a matter of urgency. 

“We have seen this recently, with some of our smaller regional utilities being impacted heavily by the 2023 flood events. 

“Replacing assets are big builds, and there is a lot of it needed. We just do not have the resources to leverage to do so. The cost of doing these big builds is huge and only increasing. These spending decisions are also heavily scrutinised by the community and the government.”  

Thek said making big investment decisions quickly can also end up costing a lot more in the long run, with every dollar of ongoing operational expenditure eventually reflected in customer bills, a reality that showcases the need to find ways to invest capital more efficiently for long term operational effectiveness. 

“When we talk about big capital investments, like building a treatment plant, some of these projects are very similar in terms of stages of construction, safety requirements and procurement processes,” she said. 

“There is a real opportunity for us to work more closely together on some of these things. By working collaboratively and planning ahead we have the opportunity to maximise the value for money that could be achieved through the use of private sector partners where resource expertise or support is required.” 

Coming together 

Strategic investment pathways represent a big opportunity in overcoming restrictions on capital investment and resource allocation, Thek said. 

“Prioritising capital investments for infrastructure and technology and finding ways to modernise and leverage regulatory compliance activities in parallel with each other, these approaches can really help,” she said. 

“The challenge with all of this is that there is often hesitation to invest upfront without clear forward planning and strategic thinking. Collaborating actively involves significant effort, and the benefits might not be immediately apparent. There is an unknown element to this with uncertainties that may require careful consideration and investment to achieve long-term rewards.” 

But there are opportunities to start small, Thek said.   

“What if we all took a bird’s eye view and asked what the next five years will look like across the sector regarding common outcomes? We could pinpoint some great collaborative opportunities and prioritise them by level of importance,” she said. 

“There is work involved to get clear on these actions and priorities, and to ensure everyone benefits equally. But the support this approach would provide could really help get us to where we need to be much more quickly and efficiently.”