Belfast Telegraph

Water provider 'must cut spending'

Northern Ireland Water needs to reduce spending by 40% to match counterparts in Great Britain, the industry's regulator has said.

The company was £6 million over budget last year and lagged behind English and Welsh businesses in efficiency.

Introducing new technology and information systems, voluntary severance schemes and two public-private finance operations increased its costs.

The Utility Regulator's report said: "The trend of NI Water's operating costs has been upward over the period. Some of this increase is justified and arises from the need to transform the service to a customer-focused, efficient and output-driven organisation."

NIW has reduced the gap with other service providers but needs to become more efficient, the document added.

The company largely met enhanced efficiency targets for operational expenditure but was £300,000 above budget from 2007-2010. NIW reduced the efficiency gap between it and England and Wales from 49% to 40%.

The regulator's report said: "This shows that the company has made progress to reduce the gap but that NIW needs to reduce its costs further by 40% to be as efficient."

Spending on water and sewerage in Northern Ireland has more than doubled in the last two decades. Over the last three years £613.8 million was spent. A total of £23 million was spent on business improvement, overhauling technology and information systems. It is designed to reduce costs and improve services. The company spent £21 million on voluntary early retirements and severance schemes.

Two public-private partnership projects also increased costs - Alpha treats half the company's bulk water supplies and Omega provides a fifth of waste-water treatment and all sludge disposal. Some of the projects were completed later than expected, with an increase in some company costs.

NIW director of finance Ronan Larkin said the company was determined to close the gap with water companies elsewhere. He said: "What we are doing at NI Water is closing a gap which has been greater than 20 years in the making. We acknowledge that the regulator has recognised that real progress has been achieved. We also accept that work still needs to be done."

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