Ofwat briefs city on the future

Water watchdog Ofwat has briefed city analysts and institutional investors on three separate consultations which will shape the financial future of the water industry.

At his regular sits down with figures from the world of finance, Philip Fletcher, chairman-designate of the Water Services Regulation Authority informed his audience the Ofwat has launched consultation on the cost of capital and the water industry’s ability to finance it, Ofwat’s new duty on sustainable development and possible changes to the review period (see related story).

Mr Fletcher pointed out that it would ultimately be for the WSRA to decide upon these issues when it absorbs Ofwat’s responsibilities in April.

Amongst other topics covered by Mr Fletcher in his briefing was the planned disposal of Thames Water Utilities by RWE and its future ownership.

He said that, as the largest water company, the sale of Thames would raise important questions.

The company faced a very large investment programme with some significant uncertainties in the future. Consequently, the new owner would need to maintain a strong financial position and credit quality for Thames.

By Sam Bond

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