Mission Possible: Successfully Implementing Totex
Totex is a concept adopted within regulated industries which are heavily dependent on infrastructure assets. The move to Totex-based regulation was motivated by a desire to regulate based on the full economic consequences of decision making, without differentiating whether expenditure was classified as operational or capital.
Regulators are trying to implement a Totex-centric approach on the basis that successfully reducing infrastructure Totex will deliver better value and lower bills for customers. However, there is no standard definition of Totex, and so many infrastructure owners are facing uncertainty about what the challenges mean for them and how they can be addressed.
Successfully implementing Totex is a ‘mission possible’. Our recent Totex advisory work in other sectors confirms there are good practices which can be learned from. “Mission Possible: Successfully Implementing Totex” outlines the five critical components that provide the building blocks for successful Totex optimisation.
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