Water firm warns on domestic bills
Average water and sewerage bills would be higher in Northern Ireland than in England and Wales if charges were imposed on domestic customers, Northern Ireland Water (NIW) has warned.
The company has fewer financial incentives to outperform and faces more uncertainty over long-term investment because it is owned by the Government yet operated as a quango, it said in a statement.
While day-to-day running is the responsibility of NIW's board, the Department for Regional Development (DRD) monitors its performance and outlook.
A statement from NIW about its annual report said: "Working as both a government company and a non-departmental public body creates organisational strains on operating both of the delivery models.
"Compared to our comparator group in England and Wales, we have fewer financial incentives to outperform; face more uncertainty over long-term investment planning, resulting in a suboptimum capital investment delivery model; and have less commercial freedoms to restructure and make decisions."
Northern Ireland is one of the few regions in Europe without domestic water or sewerage charges. More than 65% of NIW's income (around £269 million) is in the form of government subsidy.
The notional average domestic water and sewerage bill is around £408 a year or £1.12 per day in Northern Ireland. This compares with an England and Wales average bill of £379. The comparative NIW bill does not include the costs of domestic billing and domestic debt recovery costs.
NIW was formed in 2007 and is wholly owned by the DRD.
The efficiency gap between Northern Ireland and England and Wales has been reduced from 49% then to 34% in 2010/11. NIW hopes to report further reductions in this efficiency gap following operating cost savings worth £12 million in 2011/12.
NIW's annual report said customer service had improved and the company had invested more than £1.3 billion since 2007. A further £147 million is scheduled to be invested by March 2013.