Recession hits water plan

Utility giant Thames Water is blaming the recession and an expected dip in demand from commercial customers for its decision to scale back plans for a major new reservoir in Oxfordshire.

The company had planned a £1bn super-reservoir near Abingdon but now says it will consider a smaller scheme and has put back the timetable by five years.

While it says it still believes that a major reservoir will be needed in the region in the long term, immediate demand is likely to be less than previously predicted due to slower population growth and the gloomy economic outlook.

This has led to a revision of the company's strategic plan which outlines its priorities for the next 25 years.

"The economic downturn has had a significant impact on our water demand forecasts," said David Owens, chief executive of Thames.

"We are [also] now predicting a slower increase in population and household numbers from those outlined in our draft plan.

"This, combined with lower commercial water use and customers' continued efforts to save water following the drought, means that overall demand for water will increase more slowly than previously forecast, particularly in the next five years.

"Our demand management programme, which includes leakage reduction, more metering and water efficiency, remains at the centre of our plans, but in some cases we have been able to extend the period for this work to be undertaken.

"This will ease the pressure on customer bills in the short-term and enable us to deliver our programme at a steadier rate, resulting in less disruption.

"The long and difficult drought we experienced in 2005 and 2006 brought home to all of us that we cannot be complacent about our water supplies. Our customers have repeatedly told us that they do not want us to take risks.

"Additional water resources will be required by 2020 and, after carefully re-examining all the options, we still believe there is a strong case for a major new reservoir in Oxfordshire.

"However, in view of the scale of the outstanding uncertainties it is appropriate to promote some smaller schemes first. We will continue to develop the reservoir scheme to ensure that it can be operational when needed, currently indicated to be 2026.

"The uncertainties include climate change, the potential requirement to reduce existing abstractions on environmental grounds, and the rate of increase of both business and domestic consumption.

"These factors will be closely monitored and any changes will be reflected in annual updates to this plan, and in future plans - which are produced every five years."

David Gibbs



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