PR09/16: Cost base feedback report
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PR09/16


TO ALL REGULATORY DIRECTORS OF
WATER AND SEWERAGE COMPANIES
AND WATER ONLY COMPANIES

28 August 2008

Dear Colleague

Cost base feedback report

In April 2008 each company made its initial cost base submission, containing cost estimates for a range of standard projects and breakdowns of projected AMP5 expenditure. In general, most companies provided robust submissions and commendable detail and we are grateful for the work done by companies and reporters.

This report explains how we analysed these submissions and presents our initial findings. We will also give each company feedback to help them improve their final business plan submissions in April 2009.

We will take account of these findings, among other evidence, in setting the draft baseline level of capital expenditure for the new capital expenditure incentive scheme in December 2008. We will explain to each company the adjustments we have made in our baseline expenditure assumptions.

If you have any questions about this document, please contact:

Ian Hopkins
Senior Analyst, Capital Efficiency
Comparative Efficiency Team
Phone: 0121 625 1427
e-mail: ian.hopkins@ofwat.gsi.gov.uk


Yours sincerely



HELEN TWELVES
Head of Comparative Efficiency

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