Water regulator Ofwat is currently consulting on the proposals, which would see Veolia Water UK unify of its southeast and east subsidiaries, Veolia Water Southeast (VSE), Veolia Water East (VEA) and Veolia Water Central (VWC) – a move it claims will provide more business consistency and financial savings of £0.9m before its sale.

This follows an announcement by Veolia Environment two weeks ago, in which it revealed it would be selling its all its UK regulated water businesses.

Veolia Water UK confirmed to edieWater it is in discussion with Ofwat over its plans to unify its water company licenses.

Commenting further Veolia Water UK chief executive officer Frederic Devos, said that to continue to improve services it needs “to lift the restrictions that operating as three entities places upon us, particularly our ability to maximise the skills and experience of our people”.

He added: “With the continued growth of our commercial business, the flexibility of our people across our business is an essential requirement for our continued success and the development and satisfaction of our employees. Operating as one company will be good for our business and good for our customers.”

As part of the proposal, VSE and VEA would transfer to VWC, although Veolia Water UK claims the move is a not a merger as all three businesses are already under its ownership.

Veolia Water UK indirectly owns 100% of the voting shares in VCE, more than 74% of the voting shares of VSE and more than 99% of the voting shares of VEA.

Despite this, the transfer schemes are subject to approval by Ofwat and the Office of Fair Trading.

In the consultation document, Ofwat states that it considers the proposed unification of the three companies under a single licence to have “little or no impact on Ofwat’s ability to make comparisons between regulated water companies as we do not consider that this proposal will reduce the number of independent comparators”.

Ofwat’s consultation on the proposals is scheduled to finish on January 20 2012.

The consultation paper can be viewed here.

Carys Matthews

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