EIC calls for action on innovation in the water industry
Posted: Monday 29th September 2008
Leading Members of the water pollution prevention and control industry have called for the Government and OFWAT to reform the water industry to make it ‘fit for purpose’ for the challenge of climate change.
Commenting on the evidence submitted to the Cave Review of competition and innovation in water markets, Merlin Hyman, Environmental Industries Commission (EIC) Director, said:
“EIC has consistently argued that the current Periodic Review regulatory regime creates a “boom and bust” financial climate for the supply chain serving the water industry in the UK as capital expenditure tends to be concentrated towards the end of the five-year period.
“This situation leads to financial and managerial inefficiencies and instabilities in the supply chain, resulting in a skills shortage and ultimately to higher costs for consumers.
“The water sector faces a period of huge challenge in coping with the implications of climate change – and in reducing its own carbon emissions. It can ill afford to be locked into a short-term investment cycle, which inhibits innovation.”
EIC’s Water Pollution Control Working Group is calling for the Government to:
· Require Ofwat to ensure the twenty-five year strategic direction statements contain clear statements of investment priorities and how water companies will maintain investment progress across the five-year cycles.· Require Ofwat to actively assess water companies’ proposals for their encouragement of environmental innovation.
Following the current Periodic Review Government should:
· Transition the water industry to a longer-term investment programme of twenty years or more.
· Stagger the investment programmes within the water industry so that all the water companies in England and Wales are not working to concurrent cycles
