UK business faces extra £400m annual water bill

UK business is facing the prospect of an extra £400 million water bill per annum from next April, warns Utility Buyers' Forum, the UK's leading representative organisation for utility purchasers and energy managers.

The £400 million represents the difference between water companies’ projections for prices in the period April 2000 – 2005 as against proposals from the water regulator, Ian Byatt. UBF supports the tough line taken by OFWAT, although very large commercial water users have been left out of the equation altogether, at an expected additional cost to them of £100 million.

At a meeting with DETR officials last month, UBF managing director Gill Golding expressed concerns that lack of clear pricing information has made it impossible for business purchasers to separate out costs for which they should be charged and the efficiency savings from which they and other customer groups should benefit.

“Published information about water company costs is woefully lacking,” said Golding. “Unlike the gas and electricity industries which provide excellent models, the lack of transparency among water companies about costs makes it difficult for customers to argue. We don’t understand the basis on which the separate large users tariff is calculated, for example, and suspect that instead of being cost-reflective, which it is supposed to be, water companies are over-recovering costs from large users.”

UBF also asked DETR to phase the capital spending required for environmental improvements over 10 years period instead of the proposed five years. “Of course we want quality, but we are concerned that investment on this scale, over such a short period, will push prices up and not be cost-effective.” Consultation for the Periodic Review closes 30 June 1999.

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