How will be the new financial landscape

to water management?

JMC
2015

How will be the new financial

landscape to water management?
An analysis of profitability in Asset Management.
Specialized services in financing.
Jos Maria de Cuenca
2015

Although we operate optimally infrastructure, like everything, their life will end. If your feature
is essential, we must consider its renewal. The sensible thing is to do it before reaches
obsolescence, early enough to be able to assess different technical solutions and financing
alternatives.

How will be the new financial landscape

to water management?

JMC
2015

Many water supply and sanitation services are still viewing the planning the renovation of its
infrastructure as a insurmountable problem. There are very few services that have data to
perform an analysis of individual profitability for each of their facilities or groups of assets,
something basic to make a good evaluation.
When we weigh the evaluation of an asset, the benefits that replacement must overcome the
profits of keep it. That is, the result of the investment in the new active must be greater than
maintaining the existing asset. When we make this balance we have to include technical
considerations weigh: better solutions, technology upgrades, adaptation to changes in demand
and other requirements (legal, efficiency, etc.); operational or better service, security and
reducing incidents; and financial and investment needs, the potential return or the
opportunity cost. All this subjects have to be translated into concrete and economically
valuable solution to compare with the existing solution. For large plants of complicated
processes can be difficult to perform analysis, but in many cases, especially in the network, it
will be easy. Although nevertheless, assessing investment in an asset is a specialized task.
In the future, companies must systematize the acquisition of the necessary data, and
incorporate these analyzes performing their management systems, if they want to be in a
position to ensure the best use of their assets; and gain a tremendous advantage over the rest.
Then, they will experience lower risks, minimized costs and optimized their investment needs.
This will attract customers who want a professional manager to ensure the viability over time
of its water and sewerage services. But also they attract investors who will wish the safe
management of their investment during extended periods, with a return required for these
infrastructures.
Moreover, it will become increasingly common for investors take the lead, and require
specialized consultants to analyze the decisions about assets using their financing capital. In
this way they can ensure the soundness of its portfolio beyond the conventions of safety
offered by some sectors.
These new and highly specialized consulting services, will be required for water and sewage
services, and for its investors. Traditionally, these services are demanding large amounts of
capital, long-term assets, and profitability contained although more or less safe. Therefore
their investments have often been met by companies specialized in management, and have
been awarded linked to this. Although not all choices delegate the management, always and in
all cases, the investor-whether public or private, must have maximum guarantees. That's
where in a few years the support services in Asset Management and Consulting will open a
road connecting the financing, management and operation. An exciting future.