Water companies making good progress in capital investment, managing leakage

Aug. 10, 2007
The performance of water companies in England and Wales in 2006-07 was reported today by the industry's economic regulator Ofwat. The water industry has continued to perform well for customers and the environment in the year to end March 2007. In statements covering a year that saw many companies facing one of the most serious droughts of the past century Ofwat reports: Improved performance and new investment totalling £4.3 billion; Leakage cut by enough to meet...

LONDON, August 9, 2007 -- The performance of water companies in England and Wales in 2006-07 was reported today by the industry's economic regulator Ofwat. The water industry has continued to perform well for customers and the environment in the year to end March 2007.

In statements covering a year that saw many companies facing one of the most serious droughts of the past century Ofwat reports:
• Improved performance and new investment totalling £4.3 billion
• Leakage cut by enough to meet the needs of 1 million people

Investment performance
New capital expenditure of £4.3 billion is a creditable performance given the unusual demands made on many companies in the past two years. Not surprisingly in the circumstances, the focus of the past year has tended more towards securing the quality of service to customers (by investment in maintenance and infrastructure performance) than to improvement schemes.

However the industry is confident of meeting its capital expenditure obligations in all aspects of the service over the current 5-year investment period (2005-10). Total planned expenditure is £16.8 billion. This confidence is based on experience and a remarkable record of success over 3 previous 5-year cycles. Between 1990 and 2005 companies invested some £50 billion in better services and meeting the higher standards required by government to ensure the country complied with important environmental directives.

Leakage
This is the third year running that overall leakage has been reduced. However there will be no let-up in companies' determination to ensure that leakage is managed in the most cost-effective way possible.

Today's figures re-confirm the downward direction that began over a decade ago. Since 1995 the volume of water lost has been reduced by one third and levels now compare with standards across the developed world.

In the long run the only way we can be certain of keeping leakage to a common-sense minimum is by bringing aged water infrastructure up to par. Accordingly companies, with the approval of Ofwat, are investing hundreds of millions of pounds every year in repairing and replacing time-expired mains and other assets.

Flooding
Ofwat is right to draw attention also to the effects of the unprecedented floods in recent weeks. The industry's combined efforts and the achievements of individual companies in working flat out to reduce the risk and inconvenience to the public should not go without notice.

Everyone connected with water services is committed to long-term planning and will be keen to review the events of June and July 2007 and implications for investment in meeting the challenge of climate change.

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Also see: Leakage briefing paper

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