A specialist water sector advisory and consulting practice, Voeu delivers commercial advice and improvement projects for infrastructure owners, operators, and delivery providers.
Jason Marshall is the Managing Director and Principal Consultant at Voeu. With 35 years’ experience in the construction and infrastructure industries, he offers unique and valuable insights into the current state of the gravity drainage market, with a vision towards the future and how new technologies may impact the industry.
The industry today
As the trenchless technology industry continues to mature, Marshall says that there are still challenges, and opportunities, for asset owners and delivery providers within the gravity drainage renewal market.
“Trenchless technology has been used in the renewal of gravity drainage across Australia for more than 30 years. No-dig operations have become the preferred method used by asset owners for renewal of aging gravity drainage infrastructure,” he says.
According to Marshall, the replacement value of publicly owned drainage networks are valued at more than $200 billion, with an estimated $450 million spent annually on asset renewals.
These figures include the value of pipelines and structures that make up wastewater, stormwater, and culvert gravity drainage systems, along with associated costs incorporated into renewal programs.
“The renewals market for gravity pipelines is typically divided three ways; 70 per cent wastewater, 10 per cent stormwater, and 20 per cent culverts, though this varies by region,” says Marshall.
“Stormwater pipelines are underrepresented in trenchless renewal because they are typically laid shallowly, making them easier to replace using open cut methods.”
“Significant changes continue to occur within the renewals market as asset management priorities evolve, innovative technologies continue to be developed, and new delivery providers emerge,” he says.
The focus of asset owners
Marshall says that the industry is steadily increasing its focus on asset condition assessment and planning, which has resulted in asset owners improving their understanding of the condition of their existing assets. This information has been used for strategic asset management targeted at optimising the performance and whole-of-life cost of the drainage systems.
“Early adopters of trenchless technology are realising operational improvements from long-term renewal programs. Reduction of chokes, wet weather overflows, discharge to waterways, and critical asset failures are examples where program objectives are being achieved,” he says.
There is, Marshall says, an emerging trend that sees pipeline renewal being incorporated into larger capex and opex programs. A trend that he believes is likely to continue, especially with larger authorities. These programs incorporate maintenance, design, and renewals where the delivery provider is accountable for performance outcomes and risk.
“When it comes to the benefits, and risks, of an evolving industry, it’s primarily delivery providers who are in the thick of it,” he says.
A broad category itself, delivery providers can be further divided into four main groups:
- Large specialist renewal contractors that provide a wide range of products and services across the water sector in multiple regions.
- Small specialist renewal contractors that provide a limited range of products and services usually to a specific region or customer group.
- General renewal contractors that provide a limited range renewal products and services in addition to their core business, for example; civil contracting or drain cleaning.
- Specialist contractors such as plumbers who have entered renewals in small diameter pipelines or provide specialist services such as patching or junction sealing.
There is a high level of competition between large specialist contractors as they typically compete for larger contracts and have greater insight to each other’s operational costs and productivities. Contractors usually focus on delivering larger contracts to enable continuity for their lining crews and on larger diameter projects that are typically more profitable.
A niche for new tech
The product groups used in trenchless gravity drainage renewal have not changed radically over the last 30 years. These products include:
- CIPP lining
- Die reduction lining
- Fold and form lining
- Lateral lining
- Patching
- Pipe bursting
- Protective coatings
- Slip lining
- Spiral wound
- Spray linings.
Technological advancements in renewal products and services are usually enhancements made to existing products, or alternative versions of current products from new suppliers.
“A CIPP lining system that use UV or LED lights to cure the liner instead of heated water is an example of a product enhancement, while new equipment suppliers providing forms of spiral wound lining systems – products with patents that have lapsed – to the market represent an alternative version of a current product,” says Marshall.
Gravity drainage renewal is a highly competitive market, partially because the barriers for the entry of new competitors is so low.
“There are multiple versions of products available from suppliers with equipment that can be leased or rented prior to purchase,” Marshall says. “Training and technical support is provided by suppliers during bidding and through project delivery.”
“There is also a clear path for new operators – a healthy demand for operators on smaller projects in regional areas to build operational credentials and experience,” he says.
The changes within the drainage renewals market provide opportunities and challenges for the industry as innovative technologies emerge and new competitors enter the market.
“There are significant opportunities for the industry given the current unprecedented spend in the infrastructure sector, offset by the risk of cost increases and shortages in the supply of materials, equipment and skilled labour,” says Marshall.
The evolution in asset management needs to be acknowledged and considered by industry operators, as priorities shift inexorably towards strategic asset management over renewals programs.
“As a company specialising in advisory and consulting services for the water industry, Voeu uses its industry experience and commercial expertise across the water sector to partner with organisations to help them grow and become more profitable,” he says.
For more information visit Voeu.
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This article appeared in the February edition of Trenchless Australasia. Access the digital copy of the magazine here.