International comparisons report

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Ofwat home > Publications > Reports on water companies

International comparisons

Why do we make international comparisons?

Comparative competition is an important regulatory tool for us. Each year, we compare the water and sewerage companies and water only companies in England and Wales in terms of bills, service levels, quality compliance, leakage, operational costs, capital expenditure, relative efficiency, network activity and financial performance.

We use these comparisons to challenge all companies to deliver a better service to their consumers. Comparative competition also enables us to drive efficiency and service improvements when setting price limits. We believe that comparative competition has benefited both customers and the environment, leading to better services at lower costs. For instance, because of efficiency savings driven by our comparative analysis average bills will be £100 lower by 2010 than they would otherwise have been.

While we can measure and compare performance between the companies in England and Wales, we use international comparisons to:

put the regulated companies' performance into a wider context;
support regulatory decisions; and
expose differences that allow us to challenge the performance levels of the companies in England and Wales.

What process do we use?

The scale and structure of the water and sewerage sectors in England and Wales is unique. Therefore, when making international comparisons we focus on enterprises that have a distinct corporate identity and independence.

We use information from trade association publications and annual reports and accounts. Inevitably there are differences in the way this information is collected and presented and the years covered, for instance, financial years run to different timetables. We have also established benchmarking partners and this allows us to make direct comparisons. We and our benchmarking partners benefit from these comparisons.

What international comparisons do we make?

We compare data from a range of water enterprises. We concentrate on enterprises from:

Scotland;	Northern Ireland;	Canada;
Portugal;	the Netherlands;	Australia; and
the USA.

We assess relative performance in:

Customers' bills	Unit costs	Customer service levels
Water quality	Environmental performance	Water balance
Water efficiency	Leakage	Network activity

The data we use allows us to draw general conclusions at a high level and is a useful check.

Table 1 – Summary of data sources including PPP exchange rates
Table 2 – Comparison of base data
Table 3 – Comparison of operating environment
Figure 1 – Comparison of population served water

What do international partners give us?

We are grateful to our benchmarking partners and look forward to continued collaboration with them.

We welcome new opportunities to compare international water enterprises with those in England and Wales, and actively seek new partners with which to work. If you wish to contact us regarding benchmarking an overseas enterprise with the water and sewerage sectors in England and Wales, please e-mail us at internationalcomparators@ofwat.gsi.gov.uk.

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