Pipe sharing could mean greater competition in the water markets

A new water supply licensing regime in England and Wales is being created as a result of the Water Act 2003 that will allow new companies to compete in the water industry. It means business customers that use at least 50 million litres of water per year will be able to choose from a range of new water suppliers in their area.

Ofwat is inviting views in guidance it is proposing for the access codes that existing water companies will put in place to control the use of their pipes. It will affect about 2,300 customers who collectively spend around £210 million each year on water.

Tony Smith, director of competition and consumer affairs at Ofwat, said: “This is an important step towards extending opportunities for competition in the water industry. Our guidance will form the basis on which water suppliers write their access codes. The codes will be a critical part of making the market work effectively.”

The consultation runs until January 2005.