Cardiff City population is rapidly growing due to several economic and social factors. As a result, there has been an in

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Cardiff City population is rapidly growing due to several
economic and social factors. As a result, there has been an
increasing pressure on the city infrastructure including its
wastewater treatment works.
Welsh Water (the water and wastewater company for Wales)
undertook a study to assess the current capacity issues related to
the existing infrastructure. Currently, the existing wastewater
treatment works have capacity concerns and most of them are coming
to the end of their useful life. The capacity issues relate to the
quality of the effluents, which sometimes do not meet the
environmental requirements and standards; posing threats to the
environment and wildlife. Further, excessive inflows at peak times
means that there is occasional wastewater overflow into local
rivers and streams. The discharge of untreated wastewater into
watercourses has attracted media attention and angered the public.
Thousands of citizens sent letters to their MPs expressing their
anger and frustration. The Welsh Government/ Natural Resources
Wales, who is responsible for monitoring levels of water quality,
has warned Welsh Water that it will be fined for failure to meet
relevant environmental targets set out in the relevant
environmental legislation.
For these reasons, and to meet the needs of the growing
population (i.e. to treat additional flows), an intervention is
urgently required to ensure that the population of Cardiff has
access to an adequate level of facilities and services, and to
protect the environment and public health.
An outline business case and conceptual design have been
prepared to identify various options available to meet the
business/client requirements. The option to do rehabilitation and
extension works to the existing wastewater treatment works has been
ruled out because there is limited land in the vicinity that can be
used to build additional treatment units. The recommended option
requires delivery of a new wastewater treatment plant.
The project will allow Welsh Water to avoid an annual £1.5
Million fine. The annual penalty payment is estimated based on
current performance levels and it factors in increases in
quantities of raw sewage discharge due to population growth. This
project will also assist Welsh Water to improve its reputation and
image and restore public confidence.
The current population to be directly served from the project is
estimated to be 100,000 capita at 2025, and is projected to grow to
150,000 capita in 2050, the end of its operational life.
The estimated wastewater production is 150 litre per capita. In
the first year of operation, Welsh Water charges its customers £1.3
/m3 of wastewater. It also charges £280 connection fees for each
new property. These fees are projected to increase by 2% each year.
In your calculation, assume 1,000 new properties are built in the
catchment area of the plant each year. The operations and
maintenance costs are estimated to be £1 Million in 2025 increasing
by 3% each year.
The estimated investment/capital cost (CAPEX) are £60 Million
(including an appropriate allowance for Optimism Bias as per the
government guidelines). The investment/capital cost (CAPEX)
includes the cost of design, construction, and all works required
to deliver the plant in an operating state. It does not include the
cost of land because the site is made available by the Welsh
Government and no cost will be paid for its acquisition.
Carry out financial appraisal and determine whether the
project is worthwhile doing. In so doing, discuss the main
financial appraisal techniques, and use two methods to evaluate the
project.
Word limit 800-850 words