16/05/08
Water UK is pleased with the approach taken by Ofwat in the second part of its competition review published today.
In its latest consultation on water competition Ofwat has placed a welcome emphasis on encouraging innovation and the development of solutions for problems facing society and the environment.
Ofwat is proposing the kind of competition which is efficient. Competition must bring something new and better to the way the industry functions.
Competition must benefit all customers and not benefit some at the expense of others.
All customers now contribute to the environmental programme which the water industry delivers for government and society. Access pricing rules must not load the costs of this programme on to the customers who aren't able or willing to switch to new entrants.
For competition to benefit customers (business or households), we need competitors to have identified the activities about which they want to compete, namely where they will be making a difference. Without this, there will be no way of differentiating one offering from another.
Water UK is pleased to work with Ofwat and the government's own review of competition to help identify the areas of activity where competition has the greatest potential. Already the industry has taken the lead with new entrants in developing rules for opening access to water resource competition.
Water UK Economic Regulation Adviser Jeanne Golay said:
"Competition needs rules. They need to be developed by a regulatory process informed by experience and collaboration of informed parties.
"Competition is a process which produces information. It is iterative and develops as more information becomes available. We're pleased with Ofwat's emphasis on an incremental approach, which allows all parties to benefit from new information as it becomes uncovered."
Ends
For more information please contact:
Karen Thompson
020 7344 1809
Notes
1 In April this year Water UK announced the publication of an independent report by the Oxford-based Regulatory Policy Institute, Prospects for competition in the provision of water services.
3 Water UK represents all UK water and wastewater service suppliers at national and European level.
