Climate change at heart of AMP plans

Improving consumer services and tackling the effects of climate change are at the heart of the water companies' final business plans for the AMP5 cycle covering 2010-2015. The plans outline what each company needs to maintain assets, improve services and deal with its impact on the environment.

Regina Finn, chief executive officer at Ofwat, said the regulator will now "scrutinise final plans and challenge them as necessary". Ofwat will be announcing its draft decision on price limits on July 23.

Severn Trent Water, which has just awarded contracts to its AMP5 partnering contractors wants to invest £2.6B in reinforcing its water supply network, with the aim of reducing sewer flooding and improving the local water environment.

Northumbrian Water has proposed a £1.27B programme including a planned £150M expansion of Abberton reservoir, near Colchester, and maintenance of existing water treatment facilities. In the North-east, it plans investment to maintain environmental improvements to rivers, coasts and estuaries, protecting them from sewage treatment.

Anglian Water has put forward a proposed spend of £2.26B and plans to create or secure up to 7,000 jobs. Chief executive Jonson Cox said: "...we plan to invest in our high-quality services to customers while maintaining more treatment works and pumping stations than any water company, and a network of pipes that would reach around the planet almost twice. We have to make every penny count."

Thames Water's planned £5.5B investment for AMP5 will see 60% spent on maintaining current service levels and 30% to meet new statutory obligations and the London Tideway Tunnels projects. These projects will substantially reduce pollution in the Thames, especially during storms. Spending on service improvements - mainly sewer flooding and odour reduction - will account for around 10% of capital expenditure.

Thames chief executive David Owens said: "The recession is having an impact on our business, just as it is on all our customers. Many of our costs are increasing, particularly the cost of financing vital improvements to our networks. However, the demand for water is now growing more slowly and we have been able to defer some investments, which will ease the pressure on prices."

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