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British privatized water companies avoid control of the regulator because there are “limited mechanisms” to check that utilities are delivered to the promised investment, the Government’s official report states.
Water Companies plan to spend £ 104 billion for maintaining and upgrading of the system in the next five years, including £ 44 billion in new infrastructure investments.
But although the regulator is studying the business plans of the water companies, “there seems to be limited mechanisms for a direct verification, which is actually delivered,” Report 293 pages He published the environment, food and rural questions.
“This has asked questions about whether money from customers’ accounts has been used to deliver what is stated in the business plans that ofWat has agreed on,” the report added.
Findings come in front of the evidence call and part is Water sector investigation Leading cheese Jon Cunliffe, a former deputy governor of Bank of England. Backed as the largest inspection of the industry from privatization, the investigation excluded the nationalization and is likely to focus on the regulatory overhaul, and the findings have been submitted in the summer.
DiceThe chairman of the Independent Water Commission, said he did not believe that problems were “an inevitable consequence of a privatized model of a regulated company.”
Instead, they are “because of the factors, including bad decisions and bad effects by companies, regulatory disadvantages, instability of politics and the history of ad hoc changes that have left an increasingly complicated system that no longer has any effect.”
The environment of the environment Steve Reed said: “Our water paths are polluted and our water system needs to be repaired urgently. I urge people to respond to this call to evidence of what needs to be changed to clean our waterways and rebuild our broken water infrastructure.”
The examination comes because the water companies are under fire because they did not invest adequately in infrastructure while paying at the same time 83 billion pounds in dividendi And taking a debt of £ 74 billion, putting pressure on their finances.
Temma waterWhat services of approximately quarter of the population in the UK is fighting temporary renationalization according to the Government’s special administrative regime.
In order to increase the sector finances and deliver infrastructure improvements of WAT -A approved a record 26 percent of the rise Average household accounts To £ 603 this year, marking the highest annual increase from privatization.
However, the report states that there is no way of checking whether it will be used to improve infrastructure.
Although ofwat requires companies to sign up for measuring data annually, including the network repairs, the collapse of sewage and unplanned water disappearances, they only breakdowns, instead of measuring the property of the property, it is said. In addition, “companies do not seem to have comprehensive property cards or property health information”.
The replacement rate for infrastructure is also low, according to the report. Most of the main pipes were built before privatization and their replacement rate decreased significantly since 2008.
The replacement rate for the water network is 0.1 percent per year, 10 times lower than the European average, while the rate of replacement for wastewater property is 0.2 percent, three times lower than the European average of 0.6 percent, the report states.
If the companies underwent money awarded from the customer account, the regulator considered it “efficiency” and the company had to retain part of the savings, the report added.
The companies “may have historically been encouraged to follow the short -term approach to cost -effectiveness where the assets were fixed only when they failed, not proactively maintained (” repairing failure “),” the report said.
In some cases, regulators lacked the ability and resources to do their job. For example, the environment agency still used inherited IT systems for some functions, the report added.
David Black, the CEO of ofwat, said it was “clear that the water sector must change.” “Cunliffe is an opportunity for one generation to help renew the public confidence,” he added.
