Agency, Ofwat still at loggerheads over water industry investments

The debate over the next round of environmental spending by the water industry began in earnest in May with water companies estimating the cost of improvements at £11 billion between 2000-2005. Water regulator Ofwat believes the figures are too high, but is still in conflict with the Environment Agency over what environmental improvements are necessary and affordable. The Agency has set out its own priorities in a submission to Ministers which has been written in a way which will make it difficult for Ofwat to propose cuts in the programme at this stage.

The limits on prices which the water companies will be able to charge in the period 2000-5 will be set in November 1999 by Ofwat. By then, the formal debate between the companies, the Government, Ofwat and the Environment Agency over the scale of the industry's environmental programme and desirable levels of water prices will have been running for over two years.

Ofwat's Director-General, Ian Byatt, fired the opening shot last June by pro

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