Ofwat warns water companies not to block competition

20 April 2006, source edie newsroom

Business customers are being denied the right to choose their water supplier, as appointed water companies slow down the entry of competitors onto the market, water regulator Ofwat said in a warning issued on Thursday.

Customers in England and Wales who use at least 50 million litres of water a year should be able to choose their supplier, as provided by the water supply licensing (WSL) regime, but many are still unable to do so as appointed water companies delay agreements with potential competitors.

Consequently, many business customers who want to switch suppliers cannot do so and are becoming frustrated by the delays, said the Consumer Council for Water, which represents water customers.

A potential supplier who wants to buy water wholesale from appointed water companies and sell it on to customers must first finalise an agreement with that company. Ofwat accuses appointed companies of slowing this process down, and has issued a letter warning them not to delay competition.

Ofwat chairman Philip Fletcher said: "We all recognise that some teething problems are inevitable, but that should not excuse delays which frustrate the smooth operation of the market.

"The successful negotiation of agreements requires genuine co-operation by water companies and licensees, and both parties must work constructively together.

"Going forward there must be significant improvements in the pace of companies' negotiations."

Since the WSL regime was launched five months ago, Ofwat has granted four licences to alternative water suppliers to Aquavitae, Severn Trent Water Select, WaterCall and YorWater Ltd.

"Even where progress has been made, for the most part this has only resulted from Ofwat actively intervening in negotiations," Ofwat said in the letter.

The warning sent by Ofwat to water companies can be accessed here.

More details of the WSL regime are available on the Ofwat website.

Goska Romanowicz


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