0 Financing irrigation systems

DuncanMcGilvray.jpgThe second in a series of articles by Duncan McGilvray, Managing Director of Enviropro H2O Ltd, concentrates on financing the enormous cost of what is, potentially, a very large project. He also covers after project system care and, controversially, questions some of the long held beliefs which many hold as necessary to ensure system performance.

This article is intended to assist those who manage fine turf areas to get the resources they need to satisfy the demands of their employers as well as questioning how money is spent in the management of irrigation systems.

The Costs

As stated in my last article 'automatic irrigation may cost anything from £75k to £1m dependant on how far you want to go' (typically your average 18 hole greens/tees/pc controlled system will cost anything between £100k to £200k dependant on various factors) so, how can you finance that? The choices for usable water sourcing, whether mains, bore hole, reservoir etc., will be covered in a later article.

Before you even contemplate speaking to your employers about the costs involved you must do a lot of background work - this will ease the shock element when you first present your case to install a new system or upgrade an existing system, and also equip you with all the necessary background knowledge.

Installing a new system

Research all the benefits that such a system would bring, following the stated reasoning:

'It is known that the grass plant must be given supplementary water from time to time to ensure it survives. Irrigating during the day is very inefficient and wasteful as evaporation and transpiration rates are at their highest in the daytime. Therefore, it is better to irrigate overnight when water will not be wasted. Irrigating at the right time, and in the right quantities, is essential in achieving acceptable playing conditions on a golf course/sports ground etc. Hand held hoses or portable sprinklers are therefore totally inadequate.'

Up-grading a current system

Survey the system thoroughly and list your findings as follows (with expert help if necessary):

• All faults

• The inconvenience caused to and experienced by your members/players etc.

• The costs in maintenance and staff time to rectify any faults

• Any Health & Safety issues/concerns

• The waste of water and associated costs if leaks are experienced

• The Environment Agency's view on leaks and water wasted

Financing the project IrrigationToro3.jpg

Once you get the initial go ahead from your employer - not an okay to install, more a 'we will let you research the costs etc. then you can get back to us and we'll see if we should take it further' which is, in reality, what happens!

Firstly, find out if there is grant aid available - it is worth the effort and time to research, it could save your employer a considerable amount of money.

Financing in cash in one lump sum for such a project is, to many, a dream and, in my view, does not make a lot of financial sense either.

Carrying out the project in phases - typically 3 - is also not ideal because it will cost more money:

• For example three visits to site over three years is three times the transport cost

• Quotations/costs for project work on site for phases 2 & 3 will be more because of inflationary factors

• Tomorrow's money is always more expensive than today's

In addition it is more disruptive:

• Members/players are inconvenienced while contractors are on site 3 times instead of once

• Groundstaff are given additional work over three years instead of one

• Members/players are presented with differing standards and playing conditions over a three year period

Financing, by using a finance package specifically designed to suit the customer, is, in my opinion, the ideal for the following reasons:

• It is paid to the contractor by the finance company in agreed stages and you are not pestered about payments

• Your new complete system will be up and running immediately the contractor leaves site

• Your members/players and groundstaff are only inconvenienced once

• The interest on your finance deal will probably be recouped by savings in transport and phasing costs

• You will have an agreed fixed monthly payment over the finance period, which considerable helps cashflow

Most irrigation companies will give you exceptionally good deals due to their relationship with finance companies and their promised ongoing business.

Irrigation System Service and Maintenance

Now the controversial bit! Service and agreements contracts - do we really, honestly, need them?

They are offered as a sort of 'comfort blanket' where you are contracted to one company and they decommission and recommission your system and promise that you will be given priority over everyone else (if your system requires attention or repair during the irrigation/summer period) at a cost of typically £600 to £800 for your average 18 hole golf course system.

Innovative thinking would suggest a much better way to spend your money is to be more in control of your own destiny. For example:

• Have your system checked out when convenient to you

• Request a full written report to be received within 14 days - this gives you time to consider alternatives on what may need to be done and by whom

• Ensure this is carried out annually - you will then have an excellent ongoing record of your system's performance and an accurate record of the costs involved. An added bonus is that this information will satisfy the requirements for Health & Safety in record keeping and equipment maintenance

Reputable companies will only charge a nominal fee for this service and the saved money can be better spent on maintenance as required.

Research, which has been carried out by our company, would suggest that the customer must be offered a choice of level of service from full maintenance cover i.e. decommission, recommission, as previously described, to call-outs for technical repairs on an ad-hoc basis at the customer's requested convenient times.

The main point is that the customer should be given the choice and not forced into a decision based on fear of being stranded when a fault may occur in a drought situation.

Efficiently managed companies will respond to an emergency call-out whether a service contract/agreement has been signed or not.

Research also indicates a very strong case for training groundstaff to carry out basic service, maintenance and repairs to systems and would allay a lot of fears and frustrations. Good irrigation companies will offer this type of support and training free of charge when on site installing or repairing systems.

About the author: Duncan McGilvray is a former Greenkeeper and Course Manager who has been involved with membership associations and training, health and safety, course equipment sales, company restructuring and managing an irrigation company. Now on the 'dark side' Duncan can be contacted via email at: duncan.mcgilvray@enviroproh2o.com

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