The government’s stance follows Scotland’s Independent Review Panel recommendation of “exploring options” to change the status of Scottish Water.
Accountancy group KPMG is also urging “detailed consideration” be given to turning Scottish Water into a not-for-profit organisation. This would generate a £3B windfall, according to KPMG.
The Scottish government said Scottish Water is performing well as a publicly-owned organisation, adding that there are no plans to change that.
In its Independent Budget Review report, the panel concluded that the Scottish government and Parliament “should urgently review the status of Scottish Water with a view to realising the substantial financial benefits which could arise from a change of status”.
The panel believes an alternative route is for Scottish Water to become a public interest company, similar to Welsh Water. This would enable the release of significant capital to the Scottish government for other projects while attracting private investment and the return of any surplus to the public benefit.
Scottish Water said that since its formation in 2002 it has cut operating costs by 40% and saved customers more than £1B. It emphasised that the company “is almost entirely funded from customer charges” and an element of borrowing from the Scottish government to cover its long-term investment.
A spokesperson for Scottish Water said: “Any decision on the future ownership or funding of Scottish Water is a matter for the Scottish Parliament. Scottish Water is a financially strong business delivering for the people of Scotland.
“We are transforming the water industry and our regulatory asset value is now around £5.5B.”

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