Scottish Water up for grabs

SLG · Scottish Water up for grabs

English move in on Scotland's water
PETER MACMAHON

SOME of England's largest utility companies have taken the first steps towards winning a share of the multi-million-pound business to supply water to 140,000 businesses in Scotland.

Firms including Thames Water, Anglian Water and United Utilities, have joined a group set up by Scotland's water regulator to plan for the privatisation of the supply of water to Scottish firms.

Last night, opposition MSPs condemned the move, pointing to criticism of English companies' record over water bills and the environment - and warned that it was the first step towards privatising Scottish Water.

However, the Water Industry Commission for Scotland said that allowing businesses to buy water from a range of suppliers - mirroring the system for domestic customers in electricity and gas - would increase competition and improve services.

Alan Sutherland, the chief executive of the Commission, revealed that the three big English companies plus two other smaller firms from south of the Border, Aquavitae and Satec, had joined a group which is planning for the new system, due to be introduced in 2008.

Scottish Water, which the regulator says must form a separate company if it wants to bid to supply water to businesses, and other Scottish utility companies like Scottish & Southern, are also involved in what is called the licensing framework implementation group.

Mr Sutherland said that the commission was pressing ahead with work on how the market - with a "turnover" of around £330 million and potential profits of £40 million a year - would work, because ministers did not want to breach UK and European competition laws.

He added: "Ultimately this will be of real benefit to business consumers. We would expect to see them offered an enhanced level of service by the retailers."

However, Rob Gibson, the SNP's spokesman on water, said these companies have attracted criticism from watchdog bodies south of the Border.

Thames Water has missed its target for reducing leaks for the fourth year in a row after losing 894 million litres per day. Higher water bills also helped Thames to a 31.4 per cent jump in pre-tax profits this year.

Anglian Water bills rose by around 7 per cent last year and will go up at least 2 per cent this year.

Mr Gibson said: "These companies are trying to cherry-pick this business. We are seeing more and more things are being privatised, in this case privatised by stealth.

"The more that water is priced, the more Scottish customers are being sidelined in favour of shareholders who do not live in Scotland.

"This business should be in public hands and be managed in Scotland."

Spokesmen for Anglian Water, Thames Water and United Utilities have confirmed that the companies were part of the group but declined to say whether or not they would be bidding for the business.

However, David Buckell, of Aquavitae, based in Berkshire, confirmed it would be interested in supplying water to Scottish businesses.

A spokesman for the Scottish Executive said: "We would expect the commission to work closely with the water industry to establish an effective licensing regime which protects the public interest."
http://thescotsman.scotsman.com/index.cfm?id=1153402006

azzuri

Bollocks - this has disaster written all over it. As I've said time and time again - some industries are complete failures when it comes to privatisation - and water will be no different.

Cue under-investment in the system, higher artificially inflated charges due to 'scarcity' etc. etc.

Shadowman

garye

Heard an article on Radio Scotland this morning (can't find anything about it on the BBC wensite) saying that the Instituite of Civil Engineers are planning a feasibility study into a UK wide water grid that would pipe water from Scotland and Wales to the South East of England.

azzuri

Well it's not really surprising given they have very low population density levels and therefore have more than enough water to go around. Are you suggesting that a privatised water company will come in and sort out all of Scotland's water leakage problems even though there is a huge over-supply? It's amazing that the South-East of England has only been complaining about water shortgages in the last 3 or 4 years given you state their private companies are so efficient.

SLG

IF Convenor

Then they'd better make sure the prices go up to a point where it becomes economical to build the infrastructure, hadn't they?

The south wouldn't know what to do with all that soft water anyway.

garye

Personally think that if there is billions to be spent they should invest in their own infrastructure at

1) a macro level (ie plug up their leaky infrastructure)
2) a micro level, by fitting out homes with a rain water harvest system that flushed loos, watered gardens and powered washing machines & dish washers

rather than drain the resources of a smaller neighbour. i.e. us.

Cado

I think your panicing a little too much here - all this would appear to be doing is rubber stamping what has been going on since Scottish Water was formed. Thames, UU et all all have part shares in Scottish Water Solutions - this is the main 'enabler' of Scottish Water for all of its present infrastructure upgrades.

Solutions is an amalgum of consultanices, contractors, untilities companies and Scottish Water itself. SW has generaly just been looking after the operational side of the present system - even then some operational aspects have been done on a sub contract basis for ages now - Stirling Water for instance. Stirling Water came into being during the later years of EoSW.

At present SW decides what work needs to be done (to meet new Regulations/to improve efficiency cost wise) Solutions works out how to do it, SW approve it - this then passes to a framework contractor who either does it in-house or via subcontract to another framework contractor or a smaller regional contractor.

Going through some points.

October1974

Blackadder

Wish we had thought about privatising it all a couple of centuries ago. You'd all be gasping for water by now!

Cado

There wasn't anything to privitise a couple of centuries ago - most of the major schemes (ie the cities) only came into being during the Victorian era - they were all usually organised on a municipal basis - funding being aquired from the local population.

Prior to that it was all very ad hoq - individuals with water carriers, the occasional enterprising individual coming up with something.

A significant chunk of all our present water infrastructure is still original. This is why we are now starting to have problems - everything has occured in phases, depending on the Govt of the time. The infrastructure has done well, it all usually lasts a long time but it can't last forever - we've now reached that point, again, when we need to seriously invest in it but its also the point when some of the original infrastructure is starting to give way. This is something additional, also with tighter environmental and water quality regulations even further work is required.

I remember reading about a refurbishment down south somewhere - they were replacing the pipes into a moderate size english town. The pipes were formed from hollowed out oak trees, they'd been in the ground for around 150 years, had never needed any real work done to them, until now. I can remember looking at a raw water main - formed from clay pipes and sealed with string and mortar, 120 years old. I found the original drawings, hand drawn, coloured, on linen, they rolled out over the desk for over 4 metres. Found some even older original drawings (going back to the 1860s I think) all hand drawn, with maps of the area, all painted to so individual land ownerships etc.

I'm trying to add a little perspective here - with the pace of modern life and politics we often think in terms of just a few years. The Water infrastructure is in places is well over 100 years old and has been working well, this stuff lasts a long time. Some of it is not far off 'archeology' - but if its built well, it lasts generations. Where were we 200 years ago?

Whats needing to happen now is to try and bring all aspects of it together so that this on/off ad hoq nature of maintainence and capital expenditure is wrapped up into one reasonably stable, long term cash flow. The structure of how its done also needs to be flexible enough to account for all the new technology, automation etc that is increasingly getting used.

Infrastructure costs money, serious amounts of money. The institution/structure that is formed needs to be long term, that invests for the long term and is also totaly insulated from the day to day, year to year aspects of Govt since infrastructure often outlasts us as people - Govts are just a blink in the eye by comparison, yet bad policy here can cost future generations billions easily.

Define the outcomes you want SW to acheive - the physical outcomes, ie what comes out your tap, what goes into the rivers. Thereafter let it decide how best to go about that - just keep reminding all those in charge who's money it is and what you expect and hold them to account for their ability to meet those expectations, tempered with the fact that these pipes etc where around for a long time before any of us were born and will be for a long time after we're gone - therefore a long term outlook is needed.