Headlines: September 29th, 2006



Water companies have been criticised for being too slow in getting started on their 16.8 billion pound five-year investment programme. A consumer group has also urged the companies to get back on track in giving consumers what they have paid for.

The water industry regulator, Ofwat, has published ‘Financial performance and expenditure of the water companies in England and Wales 2005-06’ and said it had expected the businesses to implement their investment plans efficiently after price limits were set in 2004. In fact the report reveals that total capital investment by the industry was only 3.4 billion pounds compared with Ofwat’s expectation of 4.3 billion at this stage.

Philip Fletcher, the Ofwat chairman, said companies had been slow in getting the schemes started and now faced a stiff challenge if they were to meet all requirements by 2010. “We and our fellow regulators will monitor closely the continuing performance of water companies to ensure that they deliver fully the programmes which they accepted as part of the price limit package,” he added.

Ofwat said average increases in water bills of 12 per cent above inflation last year were meant to meet the costs of increased spending on large-scale improvements. It warned that where companies failed to deliver it would adjust price limits to ensure that customers do not pay for work that has not been done.

Meanwhile, the Consumer Council for Water is pushing companies to deliver the benefits to consumers at the speed that they have promised. The council’s chair, Dame Yve Buckland, said delayed projects had an impact on consumers. Although this was only the first year of a five-year investment period and the industry still had time to catch up, the shortfall was a lot of money that translated into work on maintaining and improving pipes, sewers and treatment works.

Dame Yve added, “Companies must deliver consumer confidence as well as investor confidence. They must demonstrate that they are providing value for money and delivering improved services.”