Market-led reforms key
A new report says that greater competition is a must for the water industry.Some of the water industry's leading figures have called for greater competition and market-led reforms in order to reduce a near £100B investment bill over the next 20 years, in a report released last month.
The report, called Water: Clear Challenges and published by FTSE-listed equipment rental and support services business Speedy, is a collection of seven essays, including contributions from Severn Trent chief executive Tony Wray and author of the Department for Environment, Food and Rural Affairs' (Defra) 2009 independent review of the industry, Professor Martin Cave.
This summer Defra is due to publish its wide-ranging White Paper on the sector and both Professor Cave and Wray hope 2011 will be the year to signal change. In another contribution, Alan Sutherland, chief executive of the Water Industry Commission (WIC), heralded the success of reforms north of the border that have given business customers a choice of water provider and called for Defra to pursue retail competition in its recommendations.
Wray calls for the introduction of a market-based framework for trading water to encourage a better use of resources, for example, by trading water capacity from areas of surplus like the North-east to supply areas of deficit in the South. He believes this, among other reforms, would help reduce the estimated £96B investment bill water companies would have to foot over the next 20 years that would in turn reduce the upward pressure on prices.
On climate change, the head of waste assurance from Speedy's advisory services team, Dr Alan Fletcher, called on water companies to share their best practice in generating energy from human waste with other industries as a key means of helping the UK to reduce its carbon footprint.
Meanwhile Speedy's head of environmental assurance, Dr Martin Gibson, believes the industry needs the support of government to help encourage changes in consumer and business behaviour to minimise water wastage.
Representing the industry's supply chain, British Water's UK director, Paul Mullord, argued for Ofwat to stagger its periodic review of water and sewage service prices in order to help curb the damaging effects of a "feast to famine" cycle of workloads.
Steve Corcoran, chief executive of Speedy, said he hoped the report would help set the agenda for discussion in what will be a hugely significant year for the sector.
He said: "Water is one of the most important strategic industries in our economy and in a world beset by economic turmoil, diminishing resources, and climate change, its fate is of huge significance.
"We've collaborated with some of the sector's leading lights in order to present a comprehensive view of key issues it faces during one of its most challenging periods since privatisation."
The report can be downloaded at www.speedyhire.plc.uk
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