Research and analysis

Fibre in Water Project: evaluation

Published 11 October 2024

Executive summary

Frazer­Nash Consultancy was commissioned by the Department for Science, Innovation and Technology (DSIT) in November of 2023 to undertake a process evaluation of the Fibre in Water project (FiW).

Fibre in Water was an open competition, run by the Department for Digital, Culture, Media & Sport (DCMS) from HM Treasury’s Shared Outcomes Fund and supported by the Department for Environment, Food & Rural Affairs (Defra), and the Cabinet Office. It allocated up to £4 million of R&D funding for projects that develop and build a pilot to facilitate the delivery of advanced broadband and mobile services via drinking water mains.

The Fibre in Water project was won and delivered by the Telecoms and Water Combined Operation (TAWCO) consortium between January 2022 and September 2023. The consortium completed a feasibility study of the technology and installation method, Phase 1 of the project. Phase 1 researched the technical solution, improved the knowledge of the legal, safety, and regulatory issues, and built an understanding of the costs and the commercial model. The decision was made at a gateway review not to progress to Phase 2, the pilot stage.

A secondary project was commissioned to be within the Fibre in Water funding, the Sandbox Environment. This additional project was undertaken by the Geospatial Commission to research potential use cases for the National Underground Asset Register (NUAR).

Evaluation aims and objectives

This evaluation aimed to assess the processes adopted in the delivery of the completed project phases to identify factors that have hindered or enabled the achievement of the intended outcomes. Specifically, we focused on the effectiveness of programme delivery, how this could be improved, the impacts achieved, the reasons for not passing the Gateway Review, and lessons learned.

Methodology

This evaluation focused on the competition phase (Phase 0), the delivery of the research and investigation phase of the project (Phase 1), and the Sandbox Environment. The evaluation questions were developed through an initial familiarisation exercise, involving a review of project documentation and consultations with project leads within DSIT. A qualitative analysis was undertaken based on evidence collected through two strands of research. This included a review of project documentation; and thematic analysis of semi-structured interviews with key stakeholders. 24 semi-structured interviews were conducted with key stakeholders to understand their perceptions of the Fibre in Water project relating to the evaluation objectives. The stakeholders were from TAWCO (Yorkshire Water, Arcadis, Comms World Ltd, University of Strathclyde, and Thames Water), DSIT, Defra, Ofwat, the Drinking Water Inspectorate, Craley Group, Kier Group, and Turner & Townsend Ltd.

Key findings

Presented below is a selection of the key findings of this process evaluation. A full discussion of findings is detailed in Section 6.

The effectiveness of delivery

• The project was well managed by DSIT. The majority of stakeholders held a positive view that the project was well managed by DSIT and the consortium leads. DSIT had in place a continuous portfolio manager, which led to well-regarded project management and resulted in clear communication between DSIT and the project consortium throughout the delivery of the project.

• Not allowing the sole technology provider to join a bidding consortium at competition phase was deemed as fair. The majority of stakeholders believed the removal of the UK’s only Fibre in Water technology provider from any bidding consortium helped ensure a fair competition phase. Allowing the UK’s sole technology provider to join a bidding consortium would have precluded competitive bids from others.

• Having no formal relationship with the Fibre in Water technology provider may have caused communication problems during the project delivery. The technology provider was not included in the winning consortium at project delivery phase. This created an informal relationship with the technology provider, providing a barrier to communications and a reduced ability to collaborate on problem solving. Thus, issues arising were more difficult for the project consortium to identify in advance and mitigating measures more difficult to put in place. Ultimately, including the technology provider formally within the delivery team at the point of winning the project might have helped to reduce risk and enable mitigations of the problems to be actioned more effectively.

Achieved outcomes

The intended impacts identified within the theory of change rely on the completion of the pilot stage, Phase 2, which was not started. Whilst the project consortium had an existing interest in Fibre in Water, this type of research and pilot project was likely to only have taken place with the aid of government intervention. Stakeholders provided a positive view of the achievements of Phase 1, recognising the key outcomes as:

• An increased understanding of the associated costs. During the project a complex and robust cost model was constructed, providing support to the commercial viability of the concept.

• Better knowledge of the regulatory requirements. Improving the knowledge of drinking water quality regulation and the cross-utility regulatory environment.

• A greater understanding of where the technology would be applicable to ensure the installation is commercially effective. By developing knowledge of the technical requirements of the route to provide a cost effective and commercially feasible adoption.

Gateway review decision

The use of a gateway review at the end of a research phase and before a pilot phase is typical for this type of innovative R&D project and helps to increase the likelihood of project success and efficiency of funding allocation. FiW was match funded, with the consortium members, excluding the unfunded and academic partners, required to finance 35% of the project. This helped to ensure that consortium members were committed to achieving the project outcomes. The project consortium made the decision not to progress the project beyond Phase 1. Their reasons for deciding not to progress past the gateway into Phase 2 were documented in Fibre in Water’s final report and described during the stakeholder interviews, summarised as:

• Absence of required regulatory approval for the technical solution. Approval was required, under Regulation 31 (Drinking Water Inspectorate), for the technology that was planned to be used in the pilot phase of the project (Phase 2). The pilot involved placing fibre-optic cables into the drinking water mains. The technology provider had regulatory approval at the outset of the FiW project for part of the combined product that would be implemented. However, the specific technical solution required for Phase 2 needed approval, which was not granted because the product did not meet the necessary requirements of the R31 conditions at the time. Please see further details of amendments required for Regulation 31 approval.

• Safety of installation. Testing, as part of the regulatory approval process, identified that the chosen installation method can disturb the water flow, unsettling sediment at the base of the water mains causing it to be introduced into the drinking water supply. This could create significant risks to water quality.

• Funding Gap. 35% of costs for the next Phase were to be covered by the consortium. Not having a technical solution with regulatory approval was sufficient to quell interest in meeting the required costs of Phase 2. In addition, the commercial potential of the project was reduced by a change in the number of potential customers planned to be connected to fibre optic broadband.

All interviewees who mentioned the gateway decision viewed it as the correct decision. A majority of the project consortium believed that if the regulatory approval existed, the other failed gateway criteria, concerning funding as well as ensuring technical viability, could have been addressed and solved.   

Lessons learnt

Lessons that could be implemented to improve the processes:

Business case supporting Phase 1

For innovative projects that are considered to have a high risk of delivery, we recommend structuring the business case to identify the value for money of the independent phases of the project. If the project does not pass the gateway review at the end of Phase 1, then the realised benefits still return value for money to the funder. In part due to the uniqueness of FiW, there is no ready example of this approach successfully being implemented in a similarly complex project.

Understanding the requirements and barriers of building a competitive consortium

FiW received two applications, one of which did not meet the bid requirements by not including a water company within the consortium. The successful consortium required changes at the project start that included replacing key members of the consortium. Providing enough time and market engagement can aid applicants to build a competitive consortium and compile a winning bid. However, a greater consideration of the potential barriers to building a competitive consortium could offer more effective support to applicants and ultimately enhance the number of quality bids received.

Inclusion of a sole technology provider, if such a monopoly exists

For future projects that have a sole technology provider, allowing their inclusion within the project consortium post competition, could mitigate potential communication issues between the project team and the technology provider. This could also aid the alignment of incentives with the project outcomes.

More adaptive project structure

A majority of the project consortium noted that they would have liked a more adaptive project structure, to allow for adjustments to be made more efficiently during delivery. This reflects the innovative nature of the project, where flexibility was important in order to allocate resources to meet the desired outcomes. As partners learned more about the environment the project was operating within, particularly with respect to understanding the regulatory landscape, being able to reallocate resources more effectively may have helped overcome some of the challenges the consortium faced.

Early and clear communication during project inception with all key government departments

The project could have benefited from stronger communication links between departments in the early stages of the project to provide clear indication of responsibilities and level of involvement of project members. A clear delegation of responsibilities can be identified and agreed using a Ways of Working document.

Trial the technical solution in a closed system

Introduce a pilot of the solution that is not within the live drinking water mains but in a closed water system. Using the Innovation Fund, Ofwat have constructed the National Leakage and Test Research Centre, which is a 5km closed water system. This process could have gathered data on water leakage detection, cost of installation, and the durability of the technology without requiring immediate access to drinking water mains.

Separation of technical and commercial feasibility studies

Phase 1 of FiW included a feasibility study which covered technical and commercial concerns. We recommend structuring the project to require first a technical assessment followed by a gateway decision which, if passed, leads to a commercial feasibility study. This should allow for more focus and resources to be directed towards each element in turn and allow more accountability within the project delivery team, across both the consortium and government sponsors.

Include regulatory expertise in the consortium or commissioning team:

The consortium had a vested interest in understanding the details of Regulation 31 and the requirements for approval. Including regulatory expertise within the consortium, for projects involving regulation of drinking water infrastructure, would help navigate the regulatory landscape and mitigate some of the risks surrounding technical feasibility.

1. Introduction

Frazer-­Nash Consultancy was commissioned by the Department for Science, Innovation and Technology (DSIT) in November of 2023 to undertake a process evaluation of the Fibre in Water (FiW) project. The FiW project was commissioned by the Department for Digital, Culture, Media, and Sport (DCMS) and delivered by the Telecoms And Water Combined Operation (TAWCO) consortium between January 2022 and September 2023. The project aimed to future proof telecoms and water infrastructure, connecting hard-to-reach areas to reliable broadband internet and reducing water leakage. To do so, this project was to pilot and facilitate the delivery of advanced broadband and mobile services through the drinking water mains, placing fibre-optic cables into water mains.

A secondary project was commissioned within the Fibre in Water funding, called the Sandbox Environment, and is included in this evaluation (Section 5). The Sandbox Environment project was undertaken by the Geospatial Commission to research potential use cases for the National Underground Asset Register (NUAR). The NUAR is a digital map of underground pipes and cables to improve the installation, maintenance, operation and repair of the four million kilometres plus of pipes, sewers, and electricity and telecoms cables which occupy the subsurface of the UK.

1.1 Process evaluation objectives

The aim of this process evaluation was to assess the process underlying each of project phases to identify the factors that have hindered or enabled its delivery and achievement of intended impacts. In doing so, a key output of this evaluation are the lessons learned for similar future projects. The specific evaluation objectives are as follows:

1. How effective and efficient has the delivery of the programme been?
2. How could the delivery of the programme be improved?
3. How far were projects able to deliver the impacts they set out to achieve?
4. Why did the project not pass the Gateway review and what can we learn for future projects?

1.2 Methodology

This evaluation focused on the competition phase (Phase 0), the delivery of the research and investigation phase of the project (Phase 1), and the Sandbox Environment. The project did not move beyond the gateway at the end of Phase 1. A qualitative analysis was undertaken based on evidence collected through two strands of research: Review of project documentation; and thematic analysis of semi-structured interviews with key stakeholders.

We conducted 24 stakeholder interviews to understand the perceptions of stakeholders involved with FiW funding. Responses have been anonymised, with care taken to ensure they are not uniquely identifiable. Any information provided in these interviews is strictly confidential and stored on our secure system. For the purposes of transcription and analysis these interviews were recorded and deleted after analysis.

Conducting interviews enabled in-depth exploration of the views of individuals and groups involved in the FiW project and informed the interpretation of other supplementary information collected during the project. The list of key stakeholders interviewed are shown in Table 1.1. As part of the Shared Outcomes Fund, FiW is a cross-departmental project, managed by DSIT.

Table 1.1 Organisations roles and responsibilities

Government sponsor	Role
DSIT	Managed the project and represented telecoms industry. A selection of DSIT funded agencies and bodies were involved in the project including, Building Digital UK (BDUK), and the Technical Design Authority (TDA)
Defra	Project sponsor, alongside DSIT and represented the interests of the water industry
Geospatial Commission	Led the Sandbox Environment project
HM Treasury	Owner of the Shared Outcomes Fund
Industry regulator	Role
Drinking Water Inspectorate (DWI)	Within the government steering group Defra represented DWI interests to maintain the drinking water quality in England and Wales
Ofwat	Part of the steering group to represent the commercial regulation of the water industry
Ofcom	Part of the steering group to represent the commercial regulation of the telecommunications industry
Telecoms and Water Combined Operation project consortium	Role
Yorkshire Water	Water partner providing the water mains assets, led the water industry technical aspects and project management
Arcadis	Project management, benefits management and provided telecoms technical support
Comms World Ltd	Telecoms partner led the telecoms technical demands
University of Strathclyde	Academic partner supported the consortium technically
Thames Water	Unfunded partner support Yorkshire Water where necessary
Project technology providers	Role
Kier	Contractor responsible for installation of the technical solution but not part of the project team
Craley Group	Technology provider but not part of the project team
Government contractor	Role
Turner & Townsend Ltd	Project management support

We analysed the findings from the project documentation and stakeholder interviews and triangulated the evidence to answer the evaluation questions. Project documentation and management information were analysed to evaluate the effectiveness of process, delivery, and impact. Sources of information included competition applications and marks, project reports and deliverables, and grant funding agreement and cash flow profiles.

Interview transcripts were analysed using thematic analysis to identify common themes, topics, ideas, and patterns.   We followed the six phases of thematic analysis^{[footnote 1]}, which is a non-linear model allowing some items to be completed in tandem. It includes familiarisation, qualitative coding and generating themes. To mitigate subjective bias, each step was completed by multiple researchers in isolation before being cross-referenced to create a balanced analysis.

Limitations of the methodology

The evaluation encountered no major unforeseen challenges. All identified stakeholders participated within the desired timeframe and all were happy to discuss their opinions of the project and the associated processes. Using the available stakeholders and information, a thorough analysis of the project was undertaken. However, there are some noted limitations in the methodology:

• Interviewees did not always remember certain aspects of the project. This can be particularly true when talking about background processes which are often not front of mind during the project for many participants and took place several months before the evaluation process. The interviews are considered as opinion and not necessarily fact. Background documentation was used to verify key information, where required.

• Self-reporting bias can also arise in interviews^{[footnote 2]}. This may arise within the context of FiW around aspects of the project that an interviewee was personally involved in. Triangulating evidence from the available project documentation offered mitigation against bias.

• Whilst is not usually necessary to include the non-winning consortium in the interview process, doing so may have provided an additional perspective on the competition phase.

• Discussions regarding Regulation 31 approval are commercial in confidence between an applicant and the DWI. The DWI is obligated to uphold the confidentiality of the details of communications and progress of applications. Therefore, we have limited additional information beyond publicly available documentation.

1.3 Structure of the report

Section 2, Background: This report begins by detailing FiW’s background, motivation, and source of funding, followed by the learnings from previous similar projects; providing the reasons why and how DCMS (later DSIT) funded FiW.

Section 3, Phase 0: Evaluates the competition stage, uncovering the opinions of the management process and the impartiality of the competition.

Section 4, Phase 1: Explains the evaluation of the research and investigation phase, detailing the adopted management processes and the impacts from delivering FiW.

Section 5, Sandbox environment: Presents the evaluation from inception to conclusion of a secondary project funded by FiW.

Section 6, Lessons learnt: Discusses the successful processes and improvements to the delivery that are recommended for future similar projects.

2. Background

This section provides an overview of the strategic rationale that led to the creation of the FiW project and a discussion of previous similar projects.

2.1 Overview of Fibre in Water

Fibre in Water was a DCMS (later DSIT) project to pilot the delivery of advanced broadband and mobile services via drinking water mains. The premise was to future proof both telecoms and water infrastructure through connecting hard-to-reach areas of the country to high speed broadband and reducing water leakage.

There were four main objectives for the pilot:

1. Complete a research and investigation phase study of the technology and installation method, estimating the costs and benefits of implementing the pilot. A gateway review was conducted after completing the feasibility study to assess whether the project should progress to the pilot stage.

2. Implement a FiW pilot solution in the UK on a substantial scale, aiming to assess technical, security, operational, regulatory, and commercial challenges and benefits for all stakeholders. The aim of the pilot was to instil confidence that the solution is capable of nationwide scalability.

3. Assist DSIT in establishing a community or ecosystem around the pilot and the installation of FiW. This would contribute to knowledge sharing through the development of project outputs.

4. Collaborate with DSIT, Defra, and their partners to analyse and address regulatory, commercial, operational, and organisational barriers hindering the widespread adoption of FiW.

Motivations

Delivering Fibre-to-the-Premises (FTTP) provides high speed broadband with a direct connection between the customer and the service provider’s core network. The most significant cost element of connecting rural and hard to reach areas has been the laying of fibre-optic cables in underground channels. The re-use of existing pipes seems therefore a potential approach to cost savings. Providing that a suitable access valve is available, a carrier pipe is inserted into the drinking water mains and fibre-optic cables are pushed through the carrier pipe. This means that each premises connected to the water mains can potentially be connected to high speed broadband^{[footnote 3]}.

The physical characteristics of the fibre-optic cables allows for the measurement of light signals along the cable. This can be used to help detect and locate water leaks. Changes in the water flow and pressure around the optical fibre can cause detectable changes in the light propagation which can help identify leaks. Water leakage is a key environmental and social challenge that Ofwat is targeting to reduce by 50% from a 2017-18 baseline by 2050^{[footnote 4]}.

The UK government has established targets for connecting and delivering high speed broadband to the entire population, together with initiatives designed to incentivise, encourage, and secure these targets. The National Infrastructure Strategy^{[footnote 5]} targets the provision of superfast gigabit broadband to 85% of the UK by 2025, reaching 99+% by 2030. The majority of this will be achieved by the deployment of fibre-optic cables, however in some very hard to reach rural areas, there will be an exploration of alternative wireless, satellite, or other high-altitude platforms^{[footnote 6]}. Alongside broadband access targets, there are also targets for mobile coverage. The shared rural network^{[footnote 7]} aims to provide 95% 4G coverage by the end of 2025.

Water leakage rates for treated, potable water are notoriously difficult to quantify, as it is difficult to attribute:

• leakage from customer pipes (Customer Side Leakage)
• leakage from company owned pipes

The manner in which leakage data is captured, recorded, and analysed changes over time, meaning that it is difficult to determine exactly what interventions have been effective. Leakage in England and Wales remains of the order of 2.9 billion litres of water per day, as reported by Ofwat^{[footnote 8]}. Some leakages arise from large scale failures, where a large pipe ruptures. Such a leakage can see millions of litres of water released in a single event. However, the more insidious issue is that of persistent small-scale leakage, which can lead to undermining of pipes, roads, and other utilities. It is generally difficult to locate and repair small-scale leakage, often requiring ground works to access the pipe. In this context, FiW could provide potential benefits, assuming there would also be sufficient development of:

• data analysis toolsets
• a trained workforce to use the data collected
• the capability to gather live data from the network with good spatial resolution.

Source of funding

The project was funded through the Shared Outcomes Fund, a HM Treasury fund for pilot projects testing innovative approaches working across multiple public sector organisations. This was designed to incentivise collaborative work across departments in challenging policy areas, such as in the intersection between water and telecoms. The Shared Outcomes Fund is an opportunity to address potential legacy institutional failures by aligning multiple government organisations together on focussed projects. This was highlighted as a benefit of FiW within the Strategic Outline Business Case (SOBC), noting the potential to realise the efficiencies and economies of scale that could be achieved through closer collaboration between the telecoms and water industries at the governmental level. The SOBC submitted as part of the Shared Outcomes Fund application highlighted the areas of interest for each department:

• Department for Environmental, Food and Rural Affairs (Defra) / Ofwat: Reduced leakage due to real time monitoring of water mains using fibre-in-water based technologies. Improvements would come from building a platform for future trial of 5G capability applied to water facilities (e.g. treatment plants).

• DCMS (later DSIT): Pilot of private 5G technology for both Fixed Wireless Access (FWA) delivery and as a platform for potential future trial of 5G technology.

• Building Digital UK (BDUK): Aligned to an interest in evaluating water infrastructure for fibre delivery.

• Ministry of Housing, Communities and Local Government (MHCLG): Connecting rural communities and enabling digital delivery of public services.

2.2 Previous Fibre in Water and related projects

This section provides a summary of past and ongoing projects researching or adopting similar technologies to FiW, placing cables or instruments inside of water or gas pipes.

Fibre optics in water mains supply

The idea of placing fibre in drinking water pipes appears to have garnered most impact from development and trials made by The Craley Group in Catalonia^{[footnote 9]} (2019) and Washington state^{[footnote 10]} (2015), prior to the UK FiW trial of the same technology. Further progress has been made by Belgian company, Fluves, who have been continuously monitoring 6km of drinking water mains in Brussels since 2020^{[footnote 11]}.

Domestically, fibre-optic cables have been used in wastewater and gas pipes but have not been installed within the drinking water supply. This shows the uniqueness of the FiW project in attempting to undertake research and investigation followed by a pilot that places fibre optic cables in drinking water mains within the UK.

Fibre optic cables in wastewater pipes

Distributed Fibre-optic Cable Sensing for Buried Pipe Infrastructure project: This project developed an installation method of fibre-optic sensing in sewer pipes to sense the flow conditions and continuously monitor pipe deterioration, allowing immediate action to be undertaken if issues arose. The University of Sheffield and Nuron Ltd were granted £640,000 by UKRI between 2019 and 2023 to improve the understanding of the technology and to develop user-friendly software that aids potential adoption^{[footnote 12]}. Based on the results of the model developed during this project, a new fibre-optic sensor was designed, built, and installed in a 20 metres pipe for further testing.

Fibre in Sewers projects: There have been several trials or proposals using the sewer systems, including in Bournemouth (2010)^{[footnote 13]} and Dundee (2010)^{[footnote 14]}. Building on this earlier research, Neos Networks adopted the Fibre in the Sewers (FiS) concept to run fibre-optic cables through existing wastewater pipes in dense urban areas to improve connectivity, reduce cost of installation, and lower disruption. As with the FiW programme, the technology has the capability to transform passive sewerage systems into smart wastewater networks, enabling water companies to identify problems earlier reducing the potential for flooding and pollution. In 2020, Neos Networks brought together five water companies as part of a technical user group to stimulate widespread adoption^{[footnote 15]}. Utilising their partnership with Thames Water, Neos Networks have installed over 17km of fibre in central London through London’s sewer network, with additional FiS installations planned throughout London, Manchester, Liverpool, Coventry, and Scotland^{[footnote 16]}.

Fibre optic cables in gas mains supply pipes

Distributed gas sensing using hollow core optical fibre: This project supports the adoption of fibre-optic cables in gas mains. From 2023 until 2026, the UKRI are providing £860,000 to fund Cranfield University and Schlumberger to develop a sensor that can detect, locate, and quantify gas concentrations along the length of an optical fibre cable. The longer term aim is the installation of these optical fibre sensors along or around gas pipelines, replacing the current, less advanced method of leak detection^{[footnote 17]}.

2.3 Case studies

There are no other projects that aim to place utilities into the drinking water mains supply. The uniqueness of FiW provides no direct comparison that can be used as a basis to reflect on the effectiveness and efficiency of project delivery. We make use of two case studies to provide different comparisons to FiW:

Case study 1: The Dark Fibre project

Background

Ofwat allocated approximately £200,000 in grant funding in April 2021 to Welsh Water and Focus Sensors to investigate the use of existing unused fibre-optic cables near water mains to detect leaks in the drinking water system. Building on the knowledge gained in Dark Fibre 1, in 2023 Ofwat awarded a further £1.3 million to a consortium led by Severn Trent Water to prove the concept is scalable, build industry confidence in this method of leak detection, and deploy it in a real-life scenario^{[footnote 18]}.

Competition stage

Dark Fibre 1 was funded by Ofwat’s Innovation in Water Challenge, with the second stage being funded by Ofwat’s Breakthrough 3 Catalyst Stream^{[footnote 19]}. Eligibility constraints are similar to FiW, as both competitions required a lead water company and a proportion of the overall cost to be matched by the participants (90% funded). Ofwat received 32 entries, 11 of which received funding.

Separation of research stages: Ofwat originally funded the research and investigation stage to understand the technical capabilities of dormant fibres as a leak detection methodology. During this preliminary stage the project team undertook experiments demonstrating that dormant fibre cables can detect leak noise up to 5m away, while the impact of leaks on ground stability can be detected up to 20m away^{[footnote 20]}. Due to the first stage providing evidence to support the technical feasibility, Ofwat funded the second stage to progress the technology towards commercial adoption. This contrasts with FiW, where Phase 1 investigated both the technical and commercial aspects of the technology. The separation of technical and commercial investigations is a useful mechanism to limit resource use until there is evidence of technical feasibility.

Lessons for Fibre in Water

Separation of research stages

The Dark Fibre project demonstrated how separating the technical and commercial research stages can reduce the initial financial risk of an innovative project while still providing the desired project outcomes.

Subsidy control

Lower financial commitment from the participants is more likely to encourage submissions for higher-risk innovative projects.

Case study 2: Energy Superhub Oxford

Background

Energy Superhub Oxford (ESO) was a trial to deliver innovation in smart local-scale energy systems. This focused on the electric vehicle (EV) charging network, hybrid battery energy storage, low carbon heating, and smart energy management technologies reducing stress on local grids^{[footnote 21]}. The trial delivered an EV charging superhub, demonstrated a grid scale hybrid battery, and electrified Oxford City Council’s vehicle fleet and heat demand in social housing^{[footnote 22]}.

It was led by the following consortium:

• EDF Renewables (lead) (formerly Pivot Power)
• Habitat Energy
• Invinity Energy Systems
• Kensa Contracting
• Oxford City Council
• University of Oxford

This consortium matched funding from UK Research and Innovation’s (UKRI) Prospering from the Energy Revolution challenge, with total funding reaching £41million^{[footnote 23]}. ESO is projected to result in greenhouse gas emissions saving of 25Ktonnes of carbon dioxide (CO) by 2032^{[footnote 24]}.

Project structure

This project used a stage gate process, similar to FiW’s gateway reviews^{[footnote 25]}, utilising a clear decision-making matrix and outcomes. This suggests that this element of FiW’s process was in line with other innovative government funded projects.

Regulatory considerations

There were significant regulatory considerations across all areas of the project, which future similar projects need to be attuned to. Over the course of the ESO project, the delivery team produced evidence of some potential negative impacts that may arise in the face of proposed regulatory changes. The team committed resources to engage in clear evidence-based conversations between industry, local and national government, and regulators. This greatly benefited the project’s outcomes. An understanding of the regulatory environment was needed at the project’s outset.  

Lessons for Fibre in Water

Include regulatory expertise in the consortium or commissioning team: The consortium had a vested interest in understanding the details of Regulation 31 and the requirements for approval. Including regulatory expertise within the consortium, for projects involving regulation of drinking water infrastructure, would help navigate the regulatory landscape and mitigate some of the risks surrounding technical feasibility.

3. Phase 0: competition

Section 3 focuses on FiW’s competition process, discussing the application requirements, the design of the competition, the level of market engagement, and the efficiency of working relationships.

The eight-week competition was run by DSIT, aided by Defra, from August 2021 to October 2021. Two responses to the tender were received. The winning consortium, Telecoms and Water Combined Operation (TAWCO), was led by Yorkshire Water and included Arcadis, NEOS Networks, the University of Strathclyde, and Thames Water.

Key findings

The key findings from analysis of the competition phase are as follows:

• government sponsors and project consortium interviewees considered the process typical for this type of government competition.

• there existed a sole provider of the key technology needed to complete the project. For fairness of competition, the technology provider was excluded from consortia at the bid stage. However, the government sponsors could have considered a greater emphasis on the risks, and associated mitigations, that a monopoly provider introduces to the technical feasibility of the project delivery.

• the government sponsors and project consortium interviewees felt the application timeline was ambitious, even for those with previous experience and work in the same area. There was speculation from the project consortium and government sponsors that this may have provided a significant barrier to entry, which was reinforced by FiW receiving only two applications.

3.1 Competition design and implementation

Pre-competition set-up

An Outline Business Case (OBC) was produced as part of the submission for the Shared Outcomes Fund, which was successful in securing funding. Within the OBC, the technical feasibility of the project delivery is described as relatively straightforward, with regulatory, organisational, and market alignment barriers to adoption highlighted as more likely risks to delivery. Whilst there was evidence of FiW being tested outside the UK, the technology was still in its infancy, had not been deployed on this scale in the UK, and was owned by a single firm. The project included a research and investigation phase that reported on the technical and commercial feasibility, however, an innovative R&D pilot project, such as this, likely deserves more emphasis on the complexity of technical feasibility from the outset.

A potential pilot route for FiW deployment, between Penistone and Barnsley in Yorkshire, was included as part of the application to the Shared Outcome Fund. Whilst applicants to the FiW competition were able to present their own route, there had been some exploratory work conducted before the competition phase either by, or on behalf of, Yorkshire Water. This potentially provided a single water company a level of awareness of the project not available to other suppliers.

Application requirements

The successful applicants noted that the application process was in line with expectations for a government-run competition and that the marking and award process was reasonable and fair. The government sponsors agreed that it was a typical process. The competition required applicants to submit three sets of documents: an Application Form^{[footnote 26]}, Project Finance Form, and Participation Agreement. The Application Form provided the bulk of the marked content for the bid, including questions on the nature of the proposed project with a total word limit of 7,800 words. Table 3.1 highlights the application requirements.

Table 3.1: Phase 0 evaluative questions

Section	Weighting	DCMS’s ideal response
A. Project description, objectives, and outcomes	25%	A clear description of the project, stating its aims, its objectives and expected outcomes.The description should describe which elements of FiW technologies will be adopted and why, detail the project’s innovative elements and summaries the expected key impacts of the trials. The description should also outline the consortia and their roles, along with key members and who’s doing what.
B. Outcome sustainability	30%	Provide a clear description of project outcomes and a reasoned and credible comparison of the benefits and costs of the project. Outlining how your successful trial will lead towards development of commercially viable products and services sustained without further government grant funding as well as the additional social value your project will create.
C. Delivery	25%	Evidence that the project plan and work package tasks have been thought through and that there is a robust approach to controlling the project in flight that is proportionate to the funding levels sought.
D. Financial	20%	A clear overview and explanation of the costs of the programme and confidence that financial management and control of the project will deliver good value for money.

^{Source: DCMS – Fibre in Water competition application form.}

A Participation Agreement outlined FiW Project Participation Principles, designed to embody the expectations of participants as follows^{[footnote 27]}:

1. Knowledge and outcomes are measured and shared
2. Collaboration takes place between projects and across the telecoms and water ecosystem
3. Fostering an open and interoperable market for FiW
4. Secure by design (ensuring that the design doesn’t compromise critical UK infrastructure)
5. Promoting the UK as a world leader in new telecoms and water technologies.

Applicants were interviewed if shortlisted. These interviews involved a panel of 5 assessors from DSIT, Defra and BDUK to further explore the proposals, answering questions identified during the initial bid evaluation.

Timelines

Successful applicants and government sponsors noted that the timescale for the competition was short. The successful applicants explained that prior to the announcement of the FiW competition, they were in the early stages of forming a potential consortium. Additional interest shown by Yorkshire Water included supporting DSIT in the development of the business case and identifying potential funding sources, such as Ofwat’s Innovation Fund. Even with prior work in this area, the successful applicants expressed difficulties compiling a competitive bid within the timeframe. For those considering the project with less or no prior work in the area, the timescales may have been discouraging and provided a barrier to building a consortium and a competitive bid.

A sole technology provider

Facilitating the use of FiW technology within the UK was one of the benefits of the FiW project, helping to secure ongoing exports, inbound investment, and raising the UK’s profile. During the development of the business case, the identified technology provider was the only company to hold a FiW technical solution with UK regulatory approval. Being the dominant company within an infant technology sector, the government sponsors decided that the technology provider should not be allowed to form part of a bidding consortium, ensuring the competition was fair. All bids submitted to the FiW competition included the use of the technology. While the decision to exclude the technology provider was well-founded, the technology provider had no formal relationship with the consortium and government sponsors during the project delivery. This issue is further discussed in Section 4.

Cross-department working

The competition was run by DCMS (later DSIT) using HM Treasury’s Shared Outcomes Fund and supported by Defra, BDUK, and the Cabinet Office. Each department had an interest in the project, providing representatives to form the panel at the interview stage. While the industry regulators were engaged in the initial stages of developing the FiW project, their involvement or sign-off on potential applications may have been useful in ensuring that the regulatory aspect of applications was well understood.

3.2 Diversity of consortiums

The winning consortium noted that the competition had arrived at a good time for them, providing an opportunity to further invest in an area that they had been exploring. However, this is not necessarily reflective of the wider market and industry interest. The government sponsors expected to receive between two and four applications, and two applications were received. The unsuccessful application passed the success threshold but was deemed ineligible due to this absence of a water company in the consortium to trial the technology at the scale set out in the competition. The government sponsors assisted in searching for a replacement water company partner but were unsuccessful.

The winning consortium was uniquely placed to be able to adequately fulfil the application requirements within the time, in part due to the previous work on fibre in water concepts. The key issue is the complexities of providing a competitive project plan that included a feasible way to complete Phase 1, requiring permission to access water mains. Given the limited resources of water companies to support R&D and the geographic monopoly they hold, we speculate that there could be difficulties in building a consortium that contains a water company. Potential suggestions for similar future competitions are:

• longer lead-in times for bidders to form the required partnerships.
• stronger and broader market engagement.
• remove the requirement to define the route during the bid.
• introduce a pilot of the solution that is not within the live drinking water mains but in a closed water system.
• research into the technical feasibility during Phase 1, removing the immediate need for live water mains access.

4. Phase 1: research and investigation

This section evaluates key aspects of delivering Phase 1, including project set-up, project management, working relationship, gateway review, and the impacts produced. Phase 1 began in April 2022 running through to the gateway decision in May 2023. 

Key findings

The key findings from analysis of the research and investigation phase are as follows:

• the majority of stakeholders held a positive view that the project was well managed by DSIT and the consortium leads. DSIT had in place a continuous portfolio manager, which led to well-regarded project management and resulted in clear communication between DSIT and the project consortium throughout the delivery of the project

• having no formal relationship with the Fibre in Water technology provider may have caused communication problems during the project delivery. The technology provider was not included in the winning consortium at project delivery phase. The project consortium reported communication challenges and a reduced ability to collaborate on problem solving with the technology provider. Thus, issues arising were more difficult for the project consortium to identify in advance and mitigating measures more difficult to put in place

• although Phase 1 did not pass the gateway review, the majority believed the project to be a success, with Phase 1 producing a greater understanding of the FiW environment and potential next steps for developing the technology

4.1 Project Set-up

Grant Funding Agreement (GFA)

The grant claim period planned to start in January 2022 but was delayed until April 2022, with consortium members working at risk until the grant agreement was signed in July 2022. The delay accommodated changes in the project agreement at the request of the consortium, that included the following^{[footnote 28]}:

• a change in funding allocation for Phase 1: The consortium requested funds to be brought forward to Phase 1^{[footnote 29]} to cover a change in scope and introduced a supporting partner^{[footnote 30]}.

• a change in the subsidy control: The FiW grant was originally regarded as ‘experimental development’, however, in accordance with a change requested by the consortium, Phase 1 was amended to ‘industrial research’. This adjustment increased the government subsidy from 35% to 65%.

• a change in telecoms partner: The original telecoms partner was replaced.

A majority of consortium members highlighted that the amendments process was slow, caused challenges with regards to working at risk, and that the delay to starting the Phase 1 likely caused a reduction in the quality of deliverables. However, the processes followed by DSIT to make such amendments were in accordance with government requirements and outside of DSIT’s immediate control. A longer competition period may have helped the consortium to make some of the adjustments during the bid process, potentially reducing some of the time required to reach a grant agreement. It was unknown whether the consortium was notified of how the changes made during project-set up would affect the Grant Funding Agreement (GFA) process. However, a government sponsor interviewee noted that organisational and working differences between public and private organisations may be the reason for the opposing views on the speed of the Grant Funding Agreement (GFA) process.

Roles and responsibilities

The project consortium had mixed views on the clarity of the project roles and responsibilities. Those who did not have a clear understanding of the project roles were usually less involved or had joined later than others. For those at arm’s length or joining after kick-off meetings, maintaining clear documentation of the roles could have aided the speed of their integration into the project.

Management of project set-up

The consortium members all believed the project set-up included a high level of governance, leading to mixed views from the consortium. The majority of the project consortium considered this level of governance to be unnecessarily time intensive, while others considered this approach to benefit the project down the line. However, these requirements were typical of such a project and DSIT was aware of this sentiment within the consortium.

4.2 Project management

Management of the overall delivery of the project and additional processes

The project consortium was managed by Yorkshire Water and Arcadis. From the government perspective, FiW was managed by DSIT. The main findings regarding the management of delivery by Yorkshire Water, Arcadis and DSIT were that:

• the communication between the project consortium and DSIT was seen as excellent, clear, and honest from both parties.

• the delivery of Phase 1 was described by the project consortium as well directed by DSIT.

• the project management from a single continuous portfolio manager at DSIT received praise.

All interviewees believed the delivery of Phase 1 was well managed by both the consortium and DSIT. A minority of the project consortium noted a concern with regards to pre-project risk appraisal, specifically relating to regulatory approval of the proposed technical solution and the exclusion of the technology provider from the consortium. However, the majority of the project consortium and government sponsors trusted that sufficient risk appraisal was conducted with regards to these two issues. The Business Case shows consideration of these risks, using the certificate of regulatory approval for the technical solution as part of the evidence supporting the risk appraisal. It was deemed common knowledge by DSIT and the project consortium that regulatory approval was in place before the project started.

A minority of the project consortium noted the length of time the financial statements took to complete. However, the majority of the project consortium believed the forms were easy to follow and comply with. All interviewees who were involved or made aware of the benefits realisation process described it as positive. A specialist benefits manager was allocated to the project to provide a detailed and robust benefits realisation process.

4.3 Cross-department working

The steering group consisted of the organisations in table 4.1. The group met on a quarterly basis to oversee the progress of the project.

Table 4.1: Steering group structure

Organisation	Role
DSIT	portfolio management and programme development and telecoms technical expert
Geospatial Commission	led the Sandbox Environment project
Building Digital UK (BDUK)	Managing procurement for project gigabit
Defra	Key government sponsor and represented the interests of the water industry and Drinking Water Inspectorate (DWI)
Ofwat	Promoting innovation in the water industry
Ofcom	Representing the interests of the telecommunications industry
HM Treasury	Providing the financing through the Shared Outcome Fund

The overall perspective of the steering and working groups was complementary, however, there was an initial difficulty in understanding the responsibilities and involvement of DSIT and Defra. A clear delegation of responsibilities, using a Ways of Working document, for example, was not evident. The consortium noted a desire to communicate directly with the industry regulators. Defra represented the regulator at steering group meetings and acted as a route of communication. Whilst adding a layer of communication, the regulator is required to ensure independence.

The consortium had a vested interest in understanding the details of Regulation 31 and the requirements for approval, however, the technology provider remained outside of the consortium. This added complication to the communication between technology provider and the consortium, which meant that updates on the status of the technology provider’s Regulation 31 approval were not necessarily as clear or timely as the consortium required. This highlights the usefulness of having regulatory expertise within the project team for projects involving regulation, such as drinking water infrastructure.

4.4 Cross-industry working

Organisational differences

Interviewees noted that differences in organisational expectations were evident, however, these differences did not create conflict or inefficiencies. All consortium members believed the project created a positive, challenging, and collaborative environment.

Cross-industry challenges

The main challenge in relation to the cross-industry nature of FiW was ensuring the regulators from both telecoms and water industries supported the technology and installation. Access to water mains for commercial purposes required additional permission. Used for either telecoms or water infrastructure, wayleaves are a right of way granted by a landowner, generally in exchange for payment. The water infrastructure already had existing wayleaves granted under the Water Act relating to core services of the water sector. The project consortium proposed that leak detection sensing inherent in the FiW pilot is directly relevant to core water sector services. However, when fibre-optic cables are introduced, the installation is unlikely to be categorised as a core water service. The project consortium engaged with landowners on the pilot route to offer payment in recognition of the additional commercial requirements of the installation^{[footnote 31]}. This provided confidence that access to water mains on the pilot route would not be a barrier to Phase 2 completion, although this did not provide a comprehensive solution to the issue of wayleave rights outside of the FiW route.

4.5 Gateway Review

The gateway decision at the end of Phase 1 was conducted by the project consortium steering group in May 2023. Leading up to the decision the consortium was tasked to prove FiW passed a set of criteria displayed below in table 4.2.

It was concluded that the project did not meet requirements on GW2.1, 2.2, and 3.2 and would not progress to Phase 2. These reasons were agreed by all partners who were aware of the decision, with the majority of the project consortium stating that if the technical solution had gained Regulation 31 by the gateway review, the other barriers could have been resolved.

Table 4.2: Gateway Criteria

Organisation	Role
commercial viability: GW1.1	Is FiW commercially viable when compared against existing fibre deployment and leak detection methods?
commercial viability: GW1.2	Is there appetite for scaling FiW within the water industry?
commercial viability: GW1.3	Is there a commercial agreement in place for the Penistone project?
technical viability: GW2.1	Are all necessary regulatory approvals in place?
technical viability: GW2.2	Is the solution safe to install?
technical viability: GW2.3	Is a viable process for operation and maintenance agreed between the Telco/Water industries?
technical viability: GW2.4	Is the market capable of scaling to enable FiW to be expanded?
project delivery: GW3.1	Is a project plan in place to meet the remaining outcomes identified at the start of the project?
project delivery: GW3.2	Is funding in place to achieve Delivery of the plan?

^{source: 20231113 D32.1 TAWCO final report V7.4}

During Phase 1, the proposed 17.3km route was reduced to 8.1km to avoid issues associated with asbestos and concrete mains^{[footnote 32]}. This change of route was seen to diminish the telecoms commercial viability of the pilot due to the decline in access to residential and corporate spaces. A further reduction in the telecoms commercial viability was caused by the unforeseen arrival of Project Gigabit South Yorkshire: A commercial operator using BDUK’s Project Gigabit funding to install gigabit capable broadband in the Penistone Valley, reducing the demand and need for FiW in the area. However, that project did not come to fruition and Penistone Valley did not receive gigabit capable broadband.

Improving the commercial viability of the concept

The project consortium suggested some adaptations which could have retained or improved the commercial viability for the telecoms partner:

• both the water and telecoms partners jointly decide the pilot route. With involvement of both parties, the commercial requirements of each industry can be taken into consideration when designing the route providing all those involved with a commercial incentive to progress to the pilot stage

• BDUK excluding the Penistone Valley from the Project Gigabit competition. This would have increased the reliance on FiW to provide the Penistone Valley with gigabit capable broadband, helping retain the commercial benefit of FiW for the telecoms partners

• those involved in the FiW project were provided with exclusive rights to the Project Gigabit funding in the Penistone Valley. This would have guaranteed no competitor could receive funding to deploy gigabit capable broadband using traditional methods in the Penistone Valley. Additionally, it could have provided supplementary funding to the commercial partner, closing the funding gap

Testing the technology without the need for access or approvals

The National Leakage and Test Research Centre is a 5km stretch of a closed water system. One industry regulator noted that testing FiW there to obtain more data and evidence could have helped inform the consortium on technical feasibility. This process could have gathered data on the concept’s impact on the respective industries with regards to water leakage detection, cost of installation, and the durability of the technology. With greater evidence supporting the commercial aspect this may likely have increased interest from the consortium to fund the following phase.

Technical solution Regulation 31 approval

During Phase 1, the technical solution was amended as:

• the original approval did not include the presence of a fibre-optic cable within the messenger pipe.
• the solution now had metallic armour to protect the fibre-optic cable.

These were changes to the approved technical solution and it was considered a new product under the Regulation 31 rules, requiring the need for a new application of approval. A greater understanding of the regulatory processes and requirements from the outset of the project may have helped the consortium to the manage risks associated with the regulation of innovative technology and even to navigate requirements for approval.

4.6 Impacts

Table 4.4 provides the anticipated outcomes of FiW, the majority of which were reliant on the construction of the pilot. However, all stakeholders displayed a positive view of the knowledge impacts the FiW funding had on the consortium, the technology, and the respected industries.

Interviewees noted the main outcomes realised during Phase 1 were:

• a deeper understanding of the associated costs, with the construction of a robust cost model
• a better knowledge of the regulatory requirements associated with the technology and dual utilities projects
• a further understanding of where this technology would be applicable and commercially effective

Table 4.4: Theory of change – Source: full business case, Fibre in Water – phase 1

Short-term	Medium-term	Long-term
Establish the pilot study findings exploring the commercial viability of deploying FiW. Connect homes with FiW fibre-to-the-premise (FTTP). Note that 5G backhaul connectivity can be provided along the fibre path. Achieve less disruption to citizens through FiW deployment compared to digging trenches thus reducing carbon emissions and deployment costs. Improve water companies monitoring of water leakage. Improve the sector’s understanding of where water assets are located to identify co-location of assets opportunities. Establish new ways of working across government departments through memorandums of understanding.	An established evidence base for the commercial viability of FiW. Improved internet connectivity sooner and at a lower cost in rural areas. This also includes aiding 5G rollout. Reduction in leakages for water companies through better monitoring. Reduced road works. Improved capability of locating, and agreeing, which assets are suitable for infrastructure sharing. Established cooperation between the key stakeholders and government departments to facilitate data sharing as well as a more holistic way to support cooperation between the two sectors.	Scaling up the deployment rate of fibre, and by extension mobile (5G) networks, in the UK and reducing environmental impact in both sectors. Development of a digital twin supporting the WTN to identify opportunities for co-location of infrastructure assets. Better telemetry for water companies to inform decision making with respect to meeting their operational targets as set by Ofwat. Embedded data sharing between the private sector and across Government through established and tested Memorandum of understanding (MoU).

The consortium believed that these outcomes could aid both the telecoms and water industries in progression towards the adoption of this technology. This in turn would create economic, social, and environmental benefits to local communities and the UK. All interviewees believed it is still a concept worthy of exploring, especially with the adoption of similar technical solutions in Scotland, Spain, and the US.

5. Sandbox environment

Introduction

Section 5 introduces a secondary project funded by FiW and evaluates the process from inception to completion. The Geospatial Commission is building a National Underground Asset Register (NUAR), a digital map of underground pipes and cables to improve the installation, maintenance, operation and repair of the four million kilometres plus of pipes, sewers, and electricity and telecoms cables which occupy the subsurface of the UK. The Geospatial Commission identified four potential use cases for the NUAR programme. These in turn included safe digging, on-site efficiency, site planning and data exchange^{[footnote 33]}. The core NUAR programme is focused exclusively on these use cases, but it has always been acknowledged that many more use cases could be applied to a centralised repository of buried asset information in a standardised form. The Fibre in Water project represented one of these additional use cases that, while outside the scope of the core NUAR programme, offered potential for further value.

A Sandbox environment was commissioned as an adjunct to the core NUAR programme to allow the Fibre in Water use case to be further explored, with a view to developing this in a generic way such that other use cases could also be evaluated if required.  We evaluate the Sandbox Environment separately to the rest of the FiW project as there were different objectives, a different case for funding, and a different project team.

Sandbox Environment Phase 1

As part of the wider FiW project, the Geospatial Commission were awarded with £300,000 for FY2021/2022 and FY2022/2023. This funded the Fibre in Water Initiative Underground Data Modelling Report^{[footnote 34]} produced in June 2022. This report outlined the initial investigation into FiW as a potential use case for the NUAR Sandbox Environment. Following the research, specific extensions to the standardised data model were identified which could be used to effectively manage information relating to the design, construction, and operation of FiW installations.

Sandbox Environment Phase 2

Phase 2 explored whether the data and platform supporting a safe digging use case could be used to support other use cases and target audiences, including FiW deployment. The research concluded that the NUAR standardised data repository, accessible via APIs, could be a powerful and flexible solution that can be applied to multiple use cases. Additional funding was suggested with a view to research additional use cases, outside of Fibre in Water and safe digging^{[footnote 35]}.

Sandbox Environment Phase 3

Following the conclusion of phase 2, the Geospatial Commission secured £230,000 of funding over an 11-month period, financed by FiW’s Shared Outcome Fund^{[footnote 36]}. Phase 3 continued the development of the research by applying the learnings to support FiW routing, deliver a practical demonstration of the NUAR system, and release a prototype supporting strategic rollout of FiW. Additional research was also conducted into whether the NUAR system could be used to aid additional use cases.

Coordination with the main project team

The Sandbox Environment operated outside of the main delivery of FiW. Communication with the core project team was limited and additional interaction was not necessary due to the independent nature of the projects. A member of the Geospatial Commission attended the steering group discussions, providing a space to represent the views of the Sandbox Environment project team and update the FiW project team on the progress of the Phase 3.

Project management

All interviewees involved in the Sandbox Environment believed the project was well managed by the Geospatial Commission and DSIT, with interviewees mentioning:

• the project team were good at constantly reviewing the scope and redirecting the resources where they would be most effective
• there was a dedicated project manager within the project team who ensured all the processes were completed to a high standard

However, the Geospatial Commission believed they lacked detailed feedback and engagement with key stakeholders in the water sector. The project team suggested earlier engagement with the key stakeholders, to allow for sufficient response time, a recommendation for future similar projects.

Impacts

All those involved in the Sandbox Environment were positive about the delivery and outcomes of the research conducted. The Geospatial Commission described Phase 3 to be fundamental as a catalyst for the follow-on NUAR Discovery project, looking at additional use cases for the NUAR programme. Future benefits from the funding are still being realised as this follow-on project continues to generate use cases supporting how the UK installs, maintains, operates, and repairs our buried infrastructure.

6. Lessons learnt

A key aspect of this evaluation was to explore opportunities for learning and development that can be applied to future projects.

6.1 Successful processes

Project management: DSIT was well-regarded by the project consortium who appreciated the regular, clear, and transparent communication to ensure all those involved in the project were aware of the project’s status and direction. There were comments about the importance of a continuous portfolio manager from DSIT and a continuous project manager from the consortium’s side. This provided FiW with individuals who understood every aspect of the project and a constant route of communication between the consortium, DSIT and the steering group.

Benefits realisation: Highlighted during the stakeholder interviews as well delivered. DSIT accredited this success to the consortium’s appointment of a benefits manager. This provided the project with specialised benefits realisation expertise to develop a robust realisation methodology and sufficient focused resource to provide regular and in-depth benefits monitoring.

Facilitating cross-industry knowledge sharing: The cross-industry nature of the project was perceived to provide a challenging and educational environment, with each industry sharing technical and organisational expertise. This facilitated the understanding of the barriers faced by both industries in progressing towards widespread adoption of FiW. It also enhanced the stakeholders’ understanding of the potential benefits this technology could bring to each industry and the wider social and environmental impacts.

Gateway review: The use of a gateway review at the end of a research phase and before a build or install phase is typical for this type of innovative R&D project and helps to increase the likelihood of a project’s success and efficiency of funding allocation. The project consortium made the decision not to progress the project beyond Phase 1. Having the gateway review in place prevented an ineffective prolonged project and enabled clear allocation of funds to different phases.

Funding structure: This was considered a key success and recommendation for future projects by the consortium. The Shared Outcomes Fund enabled the project to go ahead but by requiring a level of private funding from the consortium, it ensured all parties had commercial interest in a successful project.

6.2 Improvements to delivery

Technical scrutiny at business case stage: Given the existing use of FiW technology in other countries and the existence of Regulation 31 approval for the technology, there were limited ways to further mitigate the risk of technical feasibility before launching the project competition. However, it was subsequently understood that the Regulation 31 approval was not to be applicable for the final technical solution used in Phase 2 of the FiW project. With the benefit of hindsight, providing a greater level of technical scrutiny of the technology and the use requirements within the regulatory approval document may have identified potential risks. Such scrutiny would have had to identify that the approved technology was not suitable for final implementation within FiW, and that the technical amendments needed would require additional regulatory approval.

Competition process: The FiW competition received two applications, one of which did not meet the bid requirements by not including a water company within the consortium. The successful consortium required changes at the project start that included replacing key members of the consortium. Providing enough time and market engagement can aid applicants to build a competitive consortium and compile a winning bid. However, a greater consideration of the potential barriers to building a competitive consortium could offer more effective support to applicants and ultimately enhance the number of quality bids received.

Inclusion of the technology provider to the project consortium: Stemming from the above point, the technology provider was also not included in the winning consortium at project delivery phase. This created an informal relationship with the technology provider through Phase 1 of the project, during which, the technology provider lost UK regulatory approval for the technology that was to be used in Phase 2. A minority of the consortium interviewees expressed the belief that there was a lack of due diligence and risk mitigation strategies in place to address the challenges faced by having no formal relationship with the technology provider when the project was underway. These challenges included a lack of accurate and regular communication and a reduced ability to collaborate on problem solving. Thus, issues arising were more difficult for the project consortium to identify in advance and mitigating measures more difficult to put in place. Ultimately, including the technology provider formally within the delivery team at the point of winning the project might have helped to reduce risk and enable mitigations of the problems to be actioned effectively.

Include regulatory expertise in the consortium or commissioning team: The consortium had a vested interest in understanding the details of Regulation 31 and the requirements for approval. Including regulatory expertise within the consortium, for projects involving regulation of drinking water infrastructure, would help navigate the regulatory landscape and mitigate some of the risks surrounding technical feasibility.

Engagement of both industries and government departments:The project could have benefited from stronger communication links between departments in the early stages of project to provide a clear indication of responsibilities and level of involvement of project members. A clear delegation of responsibilities can be identified and agreed using a Ways of Working document.

Project structure:When a gateway decision is added between Phases 1 and 2, it creates a possibility that the project does not continue. We suggest structuring the business case to identify the value for money of the independent phases of the project. If the project does not pass the gateway review at the end of Phase 1, then the realised benefits still return value for money to the funder.

Phase 1 of FiW included a feasibility study which covered technical and commercial concerns. We recommend structuring the project to require first a technical assessment followed by a gateway decision which, if passed, leads to a commercial feasibility study. This should allow for more focus and resources to be directed towards each element in turn and allow more accountability of the delivery team. As part of the technical feasibility study, conducting a pilot of the solution in a closed water system, not within the live mains, could have provided evidence on water leakage detection, cost of installation, and the durability of the technology prior to the full trial. Using the Innovation Fund, Ofwat have constructed the National Leakage and Test Research Centre, which is a 5km closed water system. This process could have gathered data on water leakage detection, cost of installation, and the durability of the technology without requiring immediate access to drinking water mains.

A majority of the project consortium noted that they would have liked a more adaptive project structure, to allow for adjustments to be made more efficiently during delivery. This reflects the innovative nature of the project, where flexibility was important in order to allocate resources to meet the desired outcomes. As partners learned more about the environment the project was operating within, particularly understanding the regulatory requirements, being able to reallocate resources more effectively to meet changing demands may have helped overcome some of the challenges faced.

Appendices

Appendix 1: topic guides

The stakeholder interviews conducted were semi-structured, therefore, the questions listed in the topic guides were not necessarily asked during the interview as the stakeholders drove the direction of the interview with the interviewers’ providing prompts.

Topic guide: DSIT / DEFRA / Yorkshire Water / Arcadis / University of Strathclyde / Thames Water

1. Can you provide a brief introduction to yourself and your organisation’s role on the project?
2. Have you worked on a cross-governmental project before?
3. What are your reflections on the competition phase? What could have been done differently in the competition phase?
4. What are your reflections on the Project Delivery of Phase 1?
5. How did you find working with multiple government departments? How did you find working within the consortium?
6. What is your view on how the other processes were managed (such as contractual, financial, monitoring and risk)?
7. What could have been done differently during Phase 1?
8. What were some of the outputs of the programme?
9. What do you think was the reason this project did not progress past Gateway Review? What could have been done differently before the Gateway Review?
10. What do you think are the key lessons learned from this project?

Topic guide: Ofwat / DWI / Geospatial Commission / Turner and Townsend Ltd / Comms World Ltd/ Craley Group / Kier Group

1. Can you provide a brief introduction to yourself and your organisation’s role on the project?
2. Have you worked on a cross-governmental project before?
3. At what point did you become aware of the project and what was the process of becoming involved?
4. What are your reflections on the Project Delivery of Phase 1?
5. How did you find working with multiple government departments? How did you find working within the consortium?
6. What is your view on how the other processes were managed (such as contractual, financial, monitoring and risk)?
7. What could have been done differently during Phase 1?
8. What were some of the outputs of the programme?
9. What do you think was the reason this project did not progress past Gateway Review? What could have been done differently before the Gateway Review?
10. What do you think are the key lessons learned from this project?

1. Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. ↩

2. Donaldson, S.I. and Grant-Vallone, E.J., 2002. Understanding self-report bias in organizational behavior research. Journal of business and Psychology, 17, pp.245-260. ↩

3. Water Pipes as Pre-Existing Conduits for Fibre Cable Delivery – Communications, FTTH, Leak Detection and Asset Protection, International Conference on Smart Infrastructure and Construction 2019 (ICSIC) (icevirtuallibrary.com) ↩

4. Leakage in the water industry - Ofwat ↩

5. Gigabit broadband in the UK: Government targets, policy, and funding - House of Commons Library (parliament.uk) ↩

6. Digital Connectivity: Consultation on Improving Broadband for Very Hard to Reach (publishing.service.gov.uk) ↩

7. Home - Shared Rural Network (srn.org.uk) ↩

8. Water firms in England and Wales lost 1tn litres via leaky pipes in 2021 (Water, The Guardian ↩

9. icsic.64669.299 (icevirtuallibrary.com) ↩

10. Fiber In The Water In Anacortes, WA, Welcome to Community Networks (communitynets.org) ↩

11. Pipeline Monitoring with Farys, Fluves ↩

12. GtR (ukri.org) ↩

13. Fibre through sewers halts in Bournemouth, thinkbroadband ↩

14. Dundee’s Sewers To Carry Fibre Network, Silicon UK Tech News ↩

15. Review of the Access to Infrastructure Regulations call for evidence - government response - GOV.UK (www.gov.uk) ↩

16. Microsoft PowerPoint - FiS Connecting London (fia-online.co.uk) ↩

17. GtR (ukri.org) ↩

18. Dark Fibre 2 - Ofwat Innovation Fund (challenges.org) ↩

19. Breakthrough-3-decision-document-May-2023-final.pdf (ofwat.gov.uk) ↩

20. Ofwat Innovation Fund: Annual report ↩

21. Oxford City Council (2021). Oxfordshire Plan 2050 Report. Supplement for Scrutiny Committee. ↩

22. UKRI (2023). Energy Superhub Oxford Factsheet ↩

23. Hampton, S., Azzouz, L., Fawcett, T., Grunewald, P., Howey, D., Kumtepeli, V., Mould, T., Rose, T. (2023). Energy Superhub Oxford: Final report. Available: energysuperhuboxford.org ↩

24. UKRI (2023). Energy Superhub Oxford Factsheet ↩

25. UKRI (2021). Design Stage Gate review: draft guide for awardees ↩

26. Fibre in Water Application Form, DCMS. 2021. ↩

27. Fibre in Water Participation Agreement, DCMS. 2021. ↩

28. Fibre in Water TAWCO Grant Funding Agreement ↩

29. DBT Subsidy Control Advice ↩

30. Fibre in Water Change Request 1 ↩

31. FIW TAWCO Final Public Report - Fibre in Water project telecoms and water combined operations final report (publishing.service.gov.uk) ↩

32. Fibre in Water Change Request 2 ↩

33. National Underground Asset Register - Project Update June 2020 (publishing.service.gov.uk) ↩

34. 2022-06-22 - Fibre in Water Initiative Data Modeling Report ↩

35. 2023-05-30 – Fibre in Water NUAR Sandbox Phase 3 Development Report ↩

36. 2023-03-20 – Fibre in Water NUAR Sandbox Phase 3 Business Justification Case ↩