Ofwat accommodates £8.5 billion environment package

Water regulator Ofwat has announced draft limits on the prices which water companies will be able to charge in 2000-2005 while delivering an £8.5 billion package of environmental improvements. 1 Promised reductions in prices are more generous than anticipated - partly due to a fall in the assumed cost of capital which has sliced £500 million off an investment programme worth £15 billion. The Environment Agency is broadly satisfied with the outcome, but feels the extra cash could have been spent on improving river quality and sewer overflows rather than handed back to customers.

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