Water watchdog unveils vision for industry future

Water companies will have to set out a 25-year vision of how they aim to tackle issues such as climate change under plans being considered by Ofwat.

The proposal is included in the industry watchdog’s consultation paper price limits for customers’ water and sewerage bills for 2010 to 2015.

Regina Finn, Ofwat chief executive, said: “We aim to see a result that delivers best value for consumers and the environment at a fair price.”

The publication of a 25-year strategic direction statement is intended to show how each company proposes to tackle not only climate change, but other long term issues such as the development of competition and increased housing development.

“Innovation and creativity will be essential if the water sector is to meet the challenges it faces at a price customers regard as fair,” said Ms Finn.

“Competition is generally the best driver of that type of innovation and our decisions in setting price limits will support our aim of promoting competition in consumers’ interests.

“In the meantime, the longer term focus should concentrate companies’ minds on how they can innovate to meet the needs of their customers in the future.”

Consultation on the paper entitled Setting Price Limits for 2010-15: Framework and Approach ends in January next year.

Ofwat is expected to publish a final guidance paper in March to allow water companies to deliver draft business plans in August 2008.

“The approach we set out here has its foundations in the robust challenge that Ofwat has always brought to its scrutiny of companies’ business plans to make sure they deliver value for money for customers,” said Ms Finn.

“But in the light of the challenges of the future we do propose to make some changes to the way we set price limits.”

David Gibbs

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