Belfast Telegraph

Regulator targets £91m savings for NI Water

By Symon Ross

The Utility Regulator today proposed a £91m reduction in the revenues Northern Ireland Water will be allowed to make in the next three years.

In its first ever price control determination on NI Water, the watchdog said it had identified savings amounting to 8% in the draft business plan submitted by the company last year.

The PC10 price control process determines what it should cost NI Water to deliver continuing investment and improved water and sewerage services over the three-year period, subject to the public expenditure allocations that will be set for the company by the Northern Ireland Executive.

It also outlines what is to be achieved through its investment programme, the expected improvements in service and the level of efficiency the company is expected to deliver.

The regulator said that it had identified £68m of savings in the subsidy required from government to run services and £23m that can be taken off the bills of non-domestic customers for the 2010-2013 period. Domestic consumers in Northern Ireland do not currently pay water charges, although this is expected to change due to the squeeze on public finances.

The PC10 determination also allows for a capital investment programme worth £564m over the three years, which the regulator said is equivalent to an annual investment of £279 per property in Northern Ireland - 47% higher than the English and Welsh average.

Iain Osborne, Utility Regulator chief executive, said its decision was a key milestone in the delivery of safe and reliable water and sewerage services.

"As an independent body acting on behalf of consumers, we have rigorously scrutinised and challenged NI Water's plans to ensure we can guarantee consumers the best value for money," he said.

"We have set clear targets for NI Water and we will closely monitor its progress. Other water companies have been subject to a similar regulatory process and they have delivered. The targets we have set today are challenging but achievable and we look forward to working with the company to ensure they are met."

NI Water now has two months to accept the Utility Regulator's final determination or refer it to the Competition Commission.

A spokesman for the company said: "The PC10 process has been a complex and very detailed exercise. Today's publication of the Regulator's final determination is the latest step in the process and an important one. The company will now examine the proposals in detail and respond in due course, in line with our commitments to the Department, the Regulator and other stakeholders."