30/09/08
The Water UK position on competition was outlined in a Soapbox article in Utility Week on 12 September. This made special reference to the work of the independent Cave Review.
Water UK anticipates that the review on competition and innovation, commissioned by the Treasury and Defra, will enable the industry and its regulators to take a welcome step forward.
The main reason for this cautious optimism is that the Cave Review’s terms of reference require it to start from the objectives which government has for the water industry and water competition, namely to encourage sustainable innovation and to benefit customers and the environment. The crucial issue then becomes the determination of the specific rules for water competition that will achieve these ends.
In particular, competition rules must take account of the heavy environmental, social and health-related obligations that fall on the water industry. Critically, they must ensure that water customers share the financial burden of improving our society and its water environment and no competitor wins customers merely because it exempts them from contributing financially to these goals. The terms on which competitors gain access to the parts of the water supply chain that remain a monopoly – most essentially, the networks of pipes – need to be designed accordingly. And competition rules must also retain incentives to encourage new entrants into the market.
The Cave Review Team has its work cut out and will publish preliminary views in November 2008.
Cave Review must find the right route to competition
Published by Utility Week
Cave Review
Link to Defra website
Contact: Jeanne Golay
