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Looking at the bigger picture

Water & drainage Profile

Prices, quality, sustainability, Europe. . . there is no shortage of issues for Water UK to address, its new chairman Roy Pointer tells Lisa Russell. Photograph by David Jones.

If Roy Pointer had been asked on his first day at work to predict possible outcomes for his career, then top management in a FTSE 250 company would have been '11th on a list of 10' for the young civil engineer.

Some 40 years later, he is not only the chief executive of Anglian Water Services and on the group board, he is also newly installed as chairman of the industry's representative body Water UK. It promises to be another key period. Indeed, change has been a constant factor in the water sector in recent decades (see box).

This month's hot topic is the submission to economic regulator Ofwat of final business plans for the price review covering the next five year period in England and Wales.

Beyond that, there are plenty of other important issues to face, embracing quality, sustainability, maintenance and more.

Much has been achieved in recent years, believes Pointer.

No-one thinks twice about taking water from a tap and drinking it (and visitors to his office are, of course, offered a glassful). Rivers are now far cleaner than at any time since before the industrial revolution. 'And our bathing waters and beaches are very high quality, bringing economic generation to important tourist areas, ' he adds.

Anglian's area is the largest geographically of the water companies of England and Wales, as well as being the driest - its annual rainfall of 600mm is about the same as in Jerusalem.

Local factors such as these give each region its own headaches, but Pointer has other missions for his Water UK role.

Water UK's focus is the big issues of the day, he explains.

It tackles the common, high level themes rather than dwelling on the differences between the companies. Sustainability, quality, maintenance and European directives are ideally suited to a joint approach. And this month, no issue is bigger for the English and Welsh companies than Ofwat's price review.

'It is all-consuming at company level and for the industry, ' says Pointer.

Final business plans for 20052010 have just been submitted.

Over five years, the proposals average out at a real increase from £240 to £310 in the typical household bill for water and sewerage. Capital investment will rise by about £5bn to almost £22bn. Anglian's proposed bill rise of 17% is the lowest of the companies involved and it proposes investing some £1.8bn over the next five years.

Ofwat will now scrutinise all the proposals and publish draft decisions on each company's price limit in August.

Water UK plays a key liaison role in a highly regulated sector.

'Not only is there Ofwat, but we also need to deal with the agendas of the Environment Agency, English Nature, the Drinking Water Inspectorate and the Department for Environment, Food & Rural Affairs, ' he says.

'The trick is to strike a balance, and make sure all stakeholders are properly serviced both in terms of confronting issues and getting feedback.'

Influence outside the UK is important too. Water UK has opened an office in Brussels to help ensure that directives address the industry's needs.

Coming up soon is the EU's Water Framework Directive, which will have an impact on other industries too.

One of the biggest problems is the diffuse run-off from agriculture and highways. Do not just look to the water companies to solve implementation of the directive, warns Pointer. 'We'll be part of it, but it is much wider.'

The drive for sustainability is another great challenge, bringing together environmental, social and economic objectives.

'It is critical, both at company and at industry levels, ' he believes. 'Through Water UK we are very keen to pursue solutions - it is going to be a key plank of my term in office.'

It will be essential to marshal the information on which to base decisions. 'How do you weigh up the needs of habitats versus the potable water demands of the population? It is critically important that the industry works with all the regulators to find the best solutions, ' he says.

'There is still considerable need to improve quality, ' he adds, 'and one of the debates is by how much and at what pace.' There is an energy cost in achieving ever higher standards in water and the environment, which also increases the potential for global warming.

Nor can quality improvement take place at the expense of maintenance. 'Capital maintenance is a big issue for all companies and we're no different, ' says Pointer.

By far the best option is to maintain from a position of strength. With a car, one option is to carry out regular maintenance before trouble strikes, he says. 'Another approach is to wait until the wheel falls off - and then you have no car for a while, as well as a lot of damage.'

But it can be hard to persuade people of the need to spend when everything seems to be working well.

Great gains have been made through many areas of research and development, says Pointer, including the removal of chemicals and improved leak detection - especially vital in the dry areas of East Anglia.

Demand management is also increasingly important, both for the industry as a whole and in Pointer's own region. 'Metering is the future - it is one way we can control demand, ' he says. Already over 50% of Anglia's domestic customers are metered, and the company has pioneered special tariffs to help groups such as oneparent families on benefits.

As a council member of charity WaterAid, Pointer is also mindful of the needs of the developing world, where it can cost just £15 to provide drinking water for life.

'Multiply that by the number of people who haven't got it at the moment - it's quite a small sum, ' he concludes. 'Shouldn't the world really have a go at that?'

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