RESPONSE TO APPENDIX 3:
Q1. Do you agree with our proposal to include network reinforcement in the network plus price controls at PR24?
We are sorry to say we do not.
Ofwat’s proposals appear to be aligned to making charges reconciliation as simple as possible for water and sewerage companies whilst denying developers the right to see where, when and how water and sewerage infrastructure charges have been invested.
Cumulatively, this income stream is close to £100m per annum and since sector privatisation represents a cumulative income stream of c.£2.80 billion.
Furthermore, as part of the reforms introduced from 2018 ICs supposedly include contributory payments for in-consequence network reinforcement. If ICs are not to be perceived as an opportunistic tax on new development, then a detailed audit and disclosure of this revenue stream and associated expenditure, as originally promised by Ofwat, must be seen to be more stringent. It also remains an integral part of any business practice.
Moreover, such qualitative and quantitative disclosure would greatly assist Ofwat to secure more robust cost and charges evidence to inform their charging rules.
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