The fragile chalk river habitat of the Itchen in Sussex and the very urban River Mersey are two contrasting examples of the hundreds of local environments that could benefit from the final settlement for water prices for the period 2005 to 2010, the Environment Agency said this week.
But the Environment Agency also warned that a number of cost-effective and much-needed improvements to rivers and the water environment risk being shelved if not funded in the final settlement for water prices due in December.
Rivers including the Tame in Birmingham and the Manchester Ship Canal could miss out unless Ofwat enables water companies to fund the full programme of work required to meet policy and environmental obligations defined by Ministers. Local communities in these areas would lose out on valuable knock-on benefits to the local economy and quality of life that river improvements have been shown to trigger elsewhere, the Environment Agency said. Sufficient provision also needs to be made for work to find a long-term solution to London’s Victorian sewerage system.
The complete list of environmental improvements to be achieved through the 2005-2010 investment period is published by the Environment Agency today, as the Agency makes its formal response to Ofwat’s consultation on its draft determination of price limits for the water industry in England and Wales for the period 2005 to 2010.
The Environment Agency intends to pursue implementation of all the improvements included on the list within the 2005-10 timeframe through the normal regulatory process of setting conditions and time limits in water companies legal ‘consent’ documents.
Environment Agency Chief Executive Barbara Young said: “We welcome the extensive environmental and economic benefits that the environment programme will deliver. However, we were disappointed that some improvements, which are required to meet environmental obligations and policies set by Ministers, were excluded from Ofwat’s draft determination of prices earlier this year, nor has sufficient provision been made for work to find a long-term solution to London’s Victorian sewerage system.
“Overall, we were pleased that the draft price limits showed that companies’ costs had been challenged, and still believe there is scope for cost estimates to be trimmed further in some areas, such as investment needed to deal with sewage sludge. We welcome investment in leakage reduction and metering included in draft price limits, but still believe that water demand management needs to play a much bigger part in meeting companies’ supply/demand balance.
“The full environment programme is a small proportion (20%) of the overall industry capital investment programme. It offers excellent value for money for customers and the environment. But we question the way Ofwat has presented the environment programme’s contribution to bills as accounting for £ 20 out of an average £ 33 bill increase. Ofwat needs now to present clearly the basis behind its estimation of bill impacts.
“There is scope for more transparency in the price setting process. Much of the detail of how companies and Ofwat have treated environmental improvements in arriving at draft determinations is confidential. Whilst the Environment Agency has had access to the information, other stakeholders have not, which places a question mark over the benefit of consultation.”
The list of improvements published this week runs to 3331 local improvement schemes and investigations across England and Wales. The list can be found on the Environment Agency’s website here.
The Director General of Ofwat will publish his final determination of price limits which will determine water customers’ bills in England and Wales over the period 2005-10 in December.
FISHINGmagic Notes
The Water Industry Periodic Review is the process by which the Office of Water Services (Ofwat) sets the level of bills that water companies charge their customers. Ofwat will set prices for the period 2005 to 2010 in December 2004.
The programme of environmental investment recommended by the Environment Agency, English Nature and the Countryside Council for Wales includes:
– stopping pollution from storm sewage overflows which empty raw sewage into streams and rivers during wet weather
– protecting our most important wetland wildlife sites from pollution and over-use of water
– controlling water leakage and managing water demand, taking into account possible impacts from climate change
– tackling the nutrient phosphorus which can damage the ecological balance of lakes and rivers.
