Ofwat has published its responses to the Independent Steering Group’s report into the conduct of the 2004 Ofwat periodic review. While recognising that it would be inappropriate to comment on the conduct of the next Price Review in 2009 (PR09), Ofwat commented on a number of areas that will be important for PR09, including stating that:
- it is committed to early planning and preparatory work to deal with the large expenditure programmes which will face the water industry in the next 15 to 20 years. Ofwat is currently working with Water UK and water companies to evaluate the impact of the Water Framework Directive on the UK water industry.
- it will review the methodologies relating to efficiency, capital maintenance banding adjustments, cost base and financeability adjustments of projects in the run up to the next price review.
- it will review at the end of 2006/2007 the delivery of the early start programmes which were agreed with water companies at PR04.
- it will work with water companies to ensure that the presentation of costs and drivers for bill increases due to water quality programmes are set out consistently.
As PR09 preparation will begin shortly, Ofwat will be looking to engage the industry (including water companies and other entities active in the water sector) and key stakeholders in the planning of this price review from the outset. Ofwat’s responses to the Steering Group’s report provide some useful indications on areas that will be important in the next price review. To read Ofwat’s full responses to the Steering Group’s report, click here.
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The original publication date for this article was 22/03/2006.
