NEWS Byatt urges water industry shake up


Former Ofwat director-general, Sir Ian Byatt, has backed a devastating report on water company finances from the CentreForum thinktank. The report presents a detailed critique of water companies’ financial activities since the turn of the century. It describes an opaque, overleveraged and poorly regulated industry that consistently places short-term profit maximisation above the interests of consumers and taxpayers. The report says that in the drive to deliver profits to shareholders water companies have set up offshore tax avoidance structures and borrowed excessively to the point where they are in danger of becoming too indebted to finance their own infrastructure improvements.


The example it gives is Thames Water which has requested taxpayer


support for its ‘super-sewer’ project despite recording bumper profits over a number of years. The report, Money down the drain: getting a better deal for consumers from the water industry, makes a set of recommendations for the Government, Ofwat and Defra to implement.


It urges the imposition of a levy on ‘highly geared’ water companies, as well as German-style earnings stripping rules to prevent all companies from drawing excessive loans with the intention of avoiding tax.


Report author George Turner said, “For years now customers have been paying too much for their water and shareholders have been running off with giant profits. This is unacceptable in an industry which is so fundamental to people’s lives


and where customers cannot choose their supplier.”


Byatt, who wrote the foreword to the report, said, “This report sets out the issues involved in the financing of investment in the water sector with great clarity, making them accessible to non-expert readers, while providing a set of well thought out suggestions for action both by parliament and the regulator.” A Thames Water spokesperson


told WWT that its “ability to invest in vital infrastructure upgrades has never been stronger” and that the risk profile of the Thames Tideway Tunnel was “beyond that expected of a water and sewerage company,” which is why the digging of the tunnel “is expected to be delivered by a separate company under a risk-mitigating Government mechanism.”


Welsh Water tops performance charts


Dŵr Cymru Welsh Water (DCWW) has clinched first place in British Water’s Annual Water Company Performance Survey of the supply chain. The mutually-owned utility was awarded the highest score in four out of nine categories including ‘attitude’, ‘impact on the supply chain’ and ‘procurement’. Close on its heels was Wessex


Water, which improved its ranking from fifth in 2012 and Yorkshire Water which came a strong third. Bottom of the pile were Northern Ireland Water and Thames Water. British Water’s UK director, Paul Mullord said, “The survey captures the views and opinions of individuals working in the industry supply chain and is based on their


Wessex Water customers benefit Wessex Water says it is reinvesting


£50M from savings made through outperformance over a five-year period into schemes to benefit customers.


The company’s annual results, published in June show how Wessex Water’s continued efficiencies enabled it to deliver savings against both its capital investment programme and operating


costs, while at the


same time meeting all regulatory requirements.


The efficiency savings are being shared with customers through additional


wwtonline.co.uk customer-focussed schemes, including support


various experiences of working with the organisations they score. It is one way that British Water members and non-members can give honest feedback to industry clients on how they are seen to perform in a number of key areas.”


The full results can be viewed at www.britishwater.co.uk


Xylem integrates business


for debt advice, research and development into sustainable water and sewage treatment and keeping bills affordable.


Chairman Colin Skellett OBE said, “We have had another year of top performance and remain one of the most efficient water and sewerage companies in England and Wales. This has allowed us


to reinvest


savings into key projects benefiting customers that we would not otherwise have been able to fund without increasing future bills.” Skellett is speaking at WWT’s Sustainable Water 2013 conference, which takes


place on 10-11 September in London (see page24). August 2013 Water & Wastewater Treatment 7


Xylem Water Solutions UK has merged with its Lowara and Flow Control businesses to become a single business in the UK.


The newly integrated company is comprised of many of its well-known brands including Lowara, Flygt, Wedeco, Jabsco and Sanitaire.


Xylem says its service capability for these brands has also been enhanced by the acquisition of Pims earlier this year.


Duncan Lewis, managing


director for Xylem Water Solutions UK, who took up the role from Peter Lewington last month, said, “Merging our UK divisions will allow us to combine our trusted products, services and wealth of experience with these market-leading brands to offer complete water solutions to the municipal, industrial and building services sectors. All the time supported by expert technical support which can be called upon at a moment’s notice.”


Exploratory works for the Thames Tideway Tunnel. Financing of the project was criticised in the CentreForum report


An Ofwat spokesperson told WWT that the regulator welcomed all contributions to the debate: “We are changing a culture to get companies to take more responsibility for their plans and listen to their customers, not simply tick regulatory boxes. We have also challenged the sector to become more transparent to make sure


companies maintain their legitimacy with their customers.”


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