This week’s post will take a look at historical analysis, the below data is a look back in our time machine to 2009 and how the market was viewed at the time.
The water and waste sector in the United Kingdom is divided into three main geographical regions. The industry in the largest area, England and Wales is privatised while in the other two regions, Scotland and Northern Ireland the companies are state-owned and operated. Scottish Water Services was created in Scotland on 31st March 2002 as a state-owned corporate entity operating commercially, incorporating the businesses of the three previous Scottish water authorities. In Northern Ireland the service is an executive branch of the Department of Regional Development.
Each of the three areas has separate regulators.
In 1989 the Government passed legislation that revolutionised the management of the water and wastewater sector in England and Wales. The former Regional Water Authorities were privatised and a national economic regulator, the Office for Water Services (Ofwat), was set up to oversee them.
Very few countries have adopted as radical a privatisation model in the water and waste sector as the UK has done in England and Wales. Most countries that adopt a degree of PSP employ variants of the concession and management contract, in which the state or municipality retains ownership of the assets and contract operational management to a private company.
Water and sanitation services in England and Wales are provided by 10 privately-owned regional water and waste companies and 16 privately-owned water only companies. The companies are obligated by license to provide the essential services within their areas.
Ofwat is the economic regulator responsible for ensuring that they carry out their functions properly and are able to finance them and is also required to protect the interests of customers.
Six companies have 61% of the water market and 70% of the waste market, totaling 66% of the combined water and waste market in the UK. These are:
Thames Water (11.9% of water, 15.4% of waste)
United Utilities (11.8% of water, 14.0% of waste)
Severn Trent (12.1% of water, 12.0% of waste)
Scottish Water (10.& of water, 9.8% of waste)
Anglian (7.5% of water, 11.2% of waste)
Yorkshire (7.4% of water, 7.5% of waste)
The water only companies are much smaller and account for 14.9% of the total UK water market.
Regulation is strict and the companies have to meet standards set by three regulatory bodies.
• The Office of Water Services (Ofwat) is responsible for economic regulation.
• The Environment Agency (EA) is responsible for environmental regulation.
• The Drinking Water Inspectorate (DWI) is responsible for drinking water quality standards.
From the Historical Data series – www.nrgexpert.
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