Ofwat releases report on water and sewerage unit costs and relative efficiency

Ofwat's latest view of how efficient each of England and Wales' water and sewerage companies were last year is published Jan. 22.

Jan 27th, 2004

Jan. 27, 2004 -- Ofwat's latest view of how efficient each of England and Wales' water and sewerage companies were last year is published Jan. 22.

The assessments of relative efficiency and unit costs are a major stepping stone towards the price limits for 2005-10 which Ofwat will set later this year.

The report highlights how the industry has continued to improve its efficiency, although at a lower rate of improvement than in the past. An increasing number of companies are now in the top performance bands.

Ofwat also reports on the conclusions of the consultation to improve incentives in the next period (2005-10), and sets down the next steps in this important area. Improving the incentives to outperform will encourage each company to move the efficiency frontier forwards to the benefit of all, including customers.

Ofwat's Director General Philip Fletcher said:

" The assessments of relative efficiency which we publish in this report will be the foundation for cost reduction assumptions we will need to make when, later this year, we set price limits for the rest of this decade.

We are pleased to see an increasing number of companies which demonstrate top performance setting the challenge for the remaining companies to catch up quickly. The scope for further improvements in efficiency may be less in the future, but this should not prevent us striving to produce better value for money year on year. We will do our part to stimulate companies to continue to improve."

The Ofwat report, ' Water and sewerage unit costs and relative efficiency 2002-03' will be available on Ofwat's web site at www.ofwat.gov.uk.


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