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Curb the price cuts

The debate over the need to invest in water and sewerage infrastructure has become polarised as a choice between cutting costs to consumers or providing better returns to shareholders (see News).

However, NCE believes Ofwat director general Ian Byatt should be allowed to take another factor into account when making his final judgement on pricing and investment levels - that of civil engineering's impact on the UK's macro-economy.

The civils sector has seen three consecutive years of decline, with output down 10% over that period. The effect of this slump has been mitigated by the strength of the commercial building sector, but core skills and resources have been whittled away.

Now, just as the pundits suggest the building boom is on its last legs, the civils market appears to be finding its feet. An end to the enthusiastic slashing of the roads programme has combined with the CTRL-driven rail boom to see a possible end to the slump. But that's not what looks like happening.

The one civils success story in the last few years has been the water and sewerage sector, with around 50% growth since 1995. But the latest forecasts suggest that new investment will plummet nearly 20% during the first two years of the new millennium as the new budgets take effect.

This drop will flatten the civils sector once again, reducing employment opportunities and tax intake for the Government. And it is not as if the UK's water and sewerage infrastructure is yet rescued from decades of neglect.

So come on, Mr Byatt, see the big picture and keep the work flowing.

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