University of Sheffield

Tony O'Hagan - Academic pages - Abstracts


The ABLE Story: Bayesian Asset Management in the Water Industry

A. O'Hagan

University of Nottingham

Publication details: In The Practice of Bayesian Analysis, S. French and J. Q. Smith (eds.). Arnold, 173-198, 1997.


This Chapter describes a collaboration with UK water companies in which I have been engaged since 1988. It began when the ten publicly­owned water authorities in England and Wales were to be privatised. The privatisation took effect in November 1989, but of course the preparations for this exercise were extensive. In particular, there was considerable public anxiety over the privatisation of water and the British government wished to provide some assurance that the newly privatised water com­ panies would manage their businesses responsibly in the public interest. A regulatory body was established, known as the Office of Water Services, or OFWAT. One of the requirements placed on the water authorities in their preparations for privatisation was to submit an Asset Management Plan (AMP). The purpose of the AMP was: to set out the extent of the assets that the water company would own, their condition and any current problems with their performance; to identify the work that would be required to remedy deficiencies in performance and service, and to maintain the condition and serviceability of assets; to forecast growth in demand for water, and the consequent asset development projects needed to accommodate that growth; to set out the costs of all this asset maintenance, renewal, improvement and extension; and finally to bring all this together into a fully costed programme of asset management over a 20­year period.

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