An acceleration and optimisation of major water infrastructure projects can help deliver on the government’s growth agenda, Ofwat has said.
In a letter sent to water companies, Ofwat Chief Executive David Black sets out the challenge to see how these major projects can be progressed faster in both development and construction. By working with Ofwat and collaborating with each other and stakeholders in the sector, he asks them to use the £50bn of investment to deliver on the 30 major projects planned over the next 15 years to deliver for their customers.
In reviewing their projects, Ofwat has asked companies to deliver more efficiently and effectively to achieve earlier completion dates, and to increase or bring forward the achievement of the benefits of the major projects. Working with companies to market this programme of major projects in the most effective way and highlight the significant opportunities can bring new and existing UK and global investors to the sector and the global supply chain. Companies have been asked to set out how they might do this in response.
Alongside the letter sent to companies this week, Ofwat has published its response to the Prime Minister, Chancellor and Business and Trade Secretary, which outlines how the regulator will support the government’s growth mission in the coming years. The letter sets out the five measurable commitments that Ofwat will pursue to boost business confidence, improve the investment climate and foster sustainable growth.
This includes an unprecedented level of investment in the industry over the next five years and a doubling to £400m of Ofwat’s innovation fund to encourage water companies to embrace innovation to deliver better customer service and improve environmental performance.
Commentating on Ofwat’s work on growth, David Black said:
“We know that economic growth is key to prosperity for families up and down the country and that economic regulation has a positive part to play in that.
“As part of the 2024 price review, we have approved water companies’ investing a record £44bn to improve operational resilience, the environment and to support growth alongside £60bn in operating and maintaining water and sewage networks.
“We are committed to working collaboratively with the water industry to help accelerate the delivery of additional £50bn of investment to protect customers long-term supplies of world class drinking water. We will be seeking to ensure that this investment is delivered as efficiently as possible using our competitive financing model, which has already delivered the Thames Tideway super sewer to keep costs as low as possible for customers”.
Ofwat has also published a discussion paper which it is seeking stakeholders’ views on, produced by independent experts Baringa. It discusses the work Ofwat already does to promote economic growth, and what more Ofwat could do to promote sustainable growth, innovation and productivity, for example by supporting skills development across the water sector.
