Totex: Embedding Whole Life Costing in the Water Industry

How can the water industry optimise process performance and minimise cost?

In the management of water and wastewater assets, embedding Whole Life Costing (WLC) principles in everything from procurement, through day-to-day operation, to plant maintenance is becoming a priority in the quest to optimise process performance while minimising expense.

Such a goal depends on ending the historical separation of capital and operational cost evaluations and instead developing totex (total expenditure) models. In this way, operators no longer work with financial planning models that evaluate the risks and rewards of asset investment in terms of capital expenditure, but on how to get the best value from an asset throughout its operating life. 

What can totex achieve?

Rather than looking at totex as a financial methodology for asset planning to satisfy the regulator, it is perhaps helpful to see it as the principle that fuels a journey towards optimum operating efficiency and costs. A totex approach presents opportunities to achieve incremental benefits along the way that ultimately deliver better value for the consumer. More integrated management of water and wastewater assets should drive key operating outcomes, which in turn benefit water company customers.

• Get the white paper: Embedding whole life costing in the water industry