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Water companies are continuing to make the new investments necessary to deliver environmental and water quality improvements, according to a new report published today by Ofwat. 'Financial performance and expenditure of the water companies in England and Wales 2002-03' gives details of the companies' financial position. It provides a comparison between their actual performance over the last financial year and Ofwat's expectations when the current price limits were set. At industry level capital expenditure for the period was £3.45 billion. This is £0.4 billion (13%) higher than in 2001-02. Capital expenditure for the first three years of the period was £9.3 billion, significantly lower than the £11.2 billion projected in price limits. Companies have reported that around half of the difference is due to capital efficiency, with most of the remainder due to rephasing work on the quality programme. This has left companies with a large part of the environmental improvement programme to complete in the next two years. Capital maintenance investment increased by 12% compared to 2001-02 and is at its highest level in the current regulatory period. For the first three years of the period, capital maintenance investment was close to the amount assumed in price limits. Commenting on the report, Philip Fletcher, Director General of Water Services, said: "The overall financial performance of the water companies shows that they are responding to the challenges set for them at the last price review. They are continuing to make real efficiency savings as they deliver further improvements to the quality of drinking water and the environment. "Capital investment is rising. But the companies face a challenge in terms of the number of schemes still to be delivered by 2005. Ofwat and the Environment Agency will be seeking assurances from the water companies that the full five-year National Environment Programme will be delivered on time." The report includes an assessment of each company's water and sewerage network system. At industry level water service asset systems, such as water mains and water treatment works, remain 'stable'. The number of properties subject to low pressure continues to fall. The previous year's rise in unplanned supply interruptions, albeit from a relatively low level, has been reversed. The sewer system has improved to 'stable' from our 'marginal' assessment last year. However, above ground waste water assets moved from 'stable' to 'marginal' since some sewage treatment works have failed the effluent treatment standards set by the Environment Agency. Ofwat will continue to monitor companies' performance and expects each company to demonstrate that it has action plans in place to address any serviceability shortfalls by 2005. Other key results for 2002-03 at industry level were:
Notes to Editors: 1. The Director General of Water Services is the economic regulator of the water and sewerage companies in England and Wales. He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them. WaterVoice represents customers' interests. 2. Copies of the 'Financial performance and expenditure of the water companies in England and Wales 2002-03' report will be available from Ofwat's library (0121-625 1373) and on OfWat's website, www.ofwat.gov.uk 3. National Environment Programme – the environmental requirements to be met by the water companies in England and Wales up to 2005. The Government and the Welsh Assembly Government have agreed this programme of more than 6,000 improvements. The lists of these projects are included in the Annex to the Environment Agency document, 'Achieving the Quality – June 2000'. MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1442/1416/1496 Out of hours enquiries to pager: 08700 555 500 water 503/509. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk  | ||||||
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