Water and wastewater: 2004 in review

Debate in the world of water and wastewater during 2004 largely focused on the industry pricing review and what customers would be expected to pay, and what improvements they could expect to see, over the five year period between 2005 and 2010.

Water companies had said they would need to increase prices to pay for necessary infrastructure improvements to the network across the country including fixing leaking pipes and improving wastewater treatment and drinking water quality. Initial estimates put the price increase at around 30% to pay for a £20 billion investment programme.

However, the year started with customers saying they would not pay any more for their services and that the business plans submitted by the water companies so far did not offer value for money (see related story).

The Government soon quashed customer hopes when it published its principal guidance in March (see related story) sanctioning the price rises. However, it did appear that the Government had suppressed releasing news of the price hike, fearing the backlash of the electorate during an election year (see related story), while environmental groups called for the price rises to remain, saying the benefits to Britain’s rivers and coasts outweighed the relatively small increases in price.

As the year progressed, debate raged further, with calls from consumer groups to cut large swathes of environmental improvements from companies’ investment programmes (see related story), and then Ofwat publishing its draft price guidance saying it would slash the allowed price rises in half (see related story).

These cuts would have quashed attempts to remove such things as endocrine disruptors, or sex-change chemicals, in water (see related story), as well as schemes to improve rivers, lakes and wetlands, and schemes to protect beaches from sewage overflows during storms and heavy rainfall (see related story) which were shown to cause such problems as impetigo during the summer’s heavy rainfall (see related story).

The problem of sewage flooding overflows into watercourses was highlighted in August when heavy rainfall flooded London’s sewers causing 600,000 tonnes of untreated sewage and urban run-off into the Thames, polluting the river and killing thousands of fish (see related story).

This seemed insignificant, however, compared to the disaster which befell Boscastle in Cornwall soon after (see related story).

Eventually, after much wrangling, Ofwat agreed to allow an average household price increase of 18% or £46 (see related story) as a compromise between industry, environmental and consumer interests.

“These decisions strike the right balance. They will enable water companies to meet the needs of customers and the environment whilst continuing to deliver a safe and reliable service. The price limits are as high as they need to be but no higher,” said Philip Fletcher, Director General of Water Services at Ofwat, at the time of the announcement.

However, the Environment Agency soon complained that the exclusion of the Thames Tideway project, a 22 mile tunnel under the riverbed which would carry storm water and sewage overflow away from the river and down to treatment works away from the City, was a missed opportunity which could lead to further serious pollution incidents.

The problems of flooding will be one of the major areas to be addressed when Britain has to comply with the Water Framework Directive – an issue which has been discussed at length this year. The Directive will mean a new way of administering water districts, looking at river basins as the basic unit of planning, as piloted by such schemes as the Ribble River pilot (see related story).

Meanwhile, on a global scale, access to clean drinking water has again been found to be as limited as ever. Results from a study presented at the ‘2004 World Water Week’ in Stockholm, showed that in areas of China more people have DVD players than have access to clean, safe drinking water due to the difficulties of providing pipeline infrastructure compared to providing electricity lines and satellite dishes.

The symposium discussed the difficulties with financing large scale water infrastructure – mainly that it is a long-term investment with fairly low financial returns in the short-term, deterring private-sector financing, but also that it is most needed in precisely those countries which are unable to finance from the public purse due to international debts – and called for new finance models, mostly involving multi-lateral development banks, to offer a solution.

(see 2004 World Water Week site).

Compared to these problems, a price rise of £46 over 5 years seems relatively minor.

By David Hopkins

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