uk water industry

Question 1

Describe water industry

Answer 1

• privatised in 1989
• msot water and sewerage companies are regional monopolies with dedictaed piper networks and water supplies so household customers cannot switch
• natural monopoly
• requires regukations

Question 2

key figures of water and wastwater sector in england and wales in 2020

Answer 2

• drinking water qualty is 99.96%
• water leaked each day is 2954mn litres
• investemnt by water companeis from 2015-2020 in gbp was 44 bn
• length of water pipes owned by water companies in kmis 346 455

Question 3

examples of regulation in water industry

Answer 3

wholesale price limits fro each water company, alongside perfomance targets such as for leakage reduction, reduing pollution incidents and lowering personal water consumption enforced by OFWAT

Question 4

biggest water and sewer utility in uk by revenue in 2021

Answer 4

thames water with 2107 million in revenue

Question 5

Regulaotry failure in ofwat

Answer 5

• ofwat criticised for allowing investors and senior execs for enriching themselves while failiing to invest in crucial infrastructure
• total spending on infra fell 15% in 2020 and 2021
• since 1990, water companies whichwere privatised with no debt and handed 1.5 bn - have borrowed 53 bn and most was ued to pay 72 bn in dividends

Question 6

how did uk gov introduce comeptition at retail level

Answer 6

• utilities act as wholesales and manage their networks
• biz customers can choose their water provider in the same way they choose energy or telecoms -deregulation
• some new entrants like everflow and castlewater and conservaqua
• people can shop around for best deals
• some biz granted their own self supply licence

Question 7

motivatons fro biz to switch retail water supply

Answer 7

• reductions in bills
• mroe accurate water metering and billing as estimated 70% of bills are inaccurate
• additional value added services such as water efficiency and help in meeting leakge targtes

Question 8

issues in water industry

Answer 8

• should it be nationalised?
• benefits and costs of a naturla monooly
• will into of retail level comp be successful
• should water bills be regulated - should water companies be allowed to raise bills by more thna infaltion to fund investment in infrasturtcure
• ## sewage externalities

Question 9

thames water current day issues

Answer 9

• heavily indebted, facing potential insolvency has demanded higher household bills
• moral hazard- chancellor says it is outrageous if we were made to pick up the tab for poor management and financial engineering by thames water shareholders
• thames water is largest proviider of water, serving 16 mn in uk
• a yougov survey conducted in 2024 found many people favour renationalisation; thames water faces temporary adminstation whcihc is a form of nationalisation if cannot pay its debts