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Ofwat today published draft price limits for South West Water for the five years from 1 April 2005. Ofwat's proposals would lead to an average increase in bills of £61 to £418 over the five years, before inflation. This is less than half the increase sought by the company. But Ofwat does accept the company's case that nearly half of the increase, £29, would take effect from April 2005 to respond to the costs it faces. This would be matched by much lower increases at the end of the period. Ofwat has closely scrutinised South West Water's proposals to ensure that customers pay no more than is necessary if the company is to continue to deliver a safe, reliable and efficient water and wastewater service. The proposals would require the company to become even more efficient in delivering its services. They would enable South West Water to invest £730 million to carry out, for example, work to:
Philip Fletcher, Director General of Water Services, said: "I believe that these proposals are fair to South West Water's customers, and to the company. Although the average rise in bills for South West Water customers is nearly twice the average for England and Wales as a whole, I am convinced after reviewing the company's business plan carefully that it is necessary. Customers have told us how important it is to maintain a water service in which customers can have confidence. "Much of this increase is needed to safeguard essential water and sewerage services and to make the further improvements to drinking water quality and to the environment that the Government wants to see delivered. The increase will also help to enable the company to maintain secure supplies for customers now and in the future. "I am very conscious that these proposals may present problems for customers on low incomes. We have worked hard to ensure that the price limits are no higher than they need to be. The longer term picture is that customers in the South West would by 2009 be paying 6% more on average, before inflation, than in 1999. "The Government is currently looking into the issue of affordability of water charges for customers on low incomes. Ofwat is playing its full part in that review. "Although in Ofwat we have thought hard about these proposals, we shall consider carefully all the comments which we receive before reaching conclusions on our final price limits in December." 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. 2. The draft determinations document, 'Future water and sewerage charges 2005-10' - Draft determinations', will be available from the Ofwat library on 0121 625 1373 and on the website at www.ofwat.gov.uk 3. Representations from water companies to our draft price limits are due by 15 September, and from others by 13 October 2004. Ofwat will announce final price limits on 2 December. 4. The figures quoted in all the attached tables are before inflation. Average household bills in both tables are presented in 2004-05 prices. 5. Ofwat also published today new research into the impact of internal and external sewer flooding on customers. The publication, 'Customer Research 2004: Survey of customers affected by sewer flooding', will be available from the Ofwat Library on 0121 625 1373 and on the Ofwat website, www.ofwat.gov.uk 6. Media enquiries to Ofwat Press Office on : 0121 625 1416/1496/1442. Out of hours enquiries to pager: 08700 555 500 water 503/509.  | ||||||
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