`Lack of competition' raises water prices
15 Jan 2000
The heads of the UK water companies are resisting the introduction of competition to the market, with the result that prices are continuing to rise ahead of inflation, according to a survey from National Utility Services. `Only when the regulator starts forcing reform upon the industry will UK consumers see prices stabilise and even possibly reduce,' says NUS director Andrew Johns.
In the 12 months up to July 1998, water prices in the UK increased by an average 6.26 per cent to 70pence per litre, says NUS. Increases over the past five years have consistently outstripped inflation, it notes, and British water consumers are now paying 20 per cent more for their water than they were in 1994.
The reason for the increases is `a continued lack of competition,' the organisation claims. The regulatory body, OFWAT, is trying to increase competition, but the water companies refuse to budge.
`While extolling the benefits of competition in general, water chiefs argue that competition is not suitable for their industry,' Johns says. `They claim that water companies competing for business would focus their efforts on more densely populated areas of the country where the cost of distribution is lower. As a result, consumers in more rural areas of the country would lose out.
The UK's water is now the sixth most costly in the industrialised world, claims NUS. Germany is the dearest, with water costing £1.13 per litre; Canada the cheapest, with costs of 24pence per litre.
