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Plans for competition in water could save businesses £2bn

The government has today set out the legislation it needs to introduce more competition into the water market.

The draft Water Bill, which went before Parliament this morning, paves the way for all businesses and public bodies in England and Wales to choose which companies they buy their water and sewarage from.

Under the proposals, an organisation with multiple sites in different parts of the country could opt to negotiate with a single company for all of its water.

The government says this could result in considerable savings both in the price it pays and the cost of administration and billing.

Water minister Richard Benyon estimates this opening up of the water market could save £2bn over 30 years.

Readers' comments (8)

  • Build a National Water Grid, similar to the main National Power Grid and this would make sense; the local networks are in place right up to the end user outlets including all domestic customers. All that is needed is cross over and connections, many of which are still in place from Region to Region from pre-privatised Water Industry days. Then the market for water would be similar to Electricity services where people can shop around for the cheapest water. This strategy may even be sufficient for the local Water Company to consider wastewater re-use back into the local area or exported to other regions as a means of remaining competitive. Water, after all is a commodity and should be sold as such in a free market. Costs would then come down!

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  • One has to remember that the PH of water varies and large amounts discharged into catchments with different geology can cause changes of the biologial fauna. The damage caused may obliterate species permanently.

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  • @Peter Wilson seems to have ignored the fact that water is massive compared to gas and electricity and transferring water for a long distance on a permanent basis will not be cost effective.
    There is a reason for the current division of regions by catchment areas.

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  • The current division was based on natural run-off to rivers not drinking water supply. Thatcher privatised water supply undertakings and now several networks are not even owned by UK companies, so there will be little chance of a national water grid, however sensible this might be. Instead of widespread investment in capturing and storing rainwater run-off, we are being conditioned to thinking of drinking water shortages which will no doubt be used to justify higher charges.


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  • Some above seem to be missing the point. The water would not necessarily travel far or mix, it just has to be available. Power Stations in Scotland don't supply power down to the SE of England, they feed into a Grid - the total inputs into the Grid at any time being dictated by the UK demand for power.

    There is no reason why the Water Grid, transferring water between limited numbers of nodes within adjacent Water Company networks can't be set up as a separate entity - similar to the National Power Grid, e.g. connecting adjacent Reservoirs, rivers and canals and groups of boreholes!

    Who owns the separate Water Companies is irrelevant - the National Power Grid works!

    Water re-use has to be a major consideration!

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  • Except in some special cases, the connections between companies are usually quite small and only connect local systems together, unless they were originally designed as large transfers.

    Surely, the water company supplying a number of sites over the country will have to negotiate with each local supplier to buy the supplies to sell on. Similarly a water company offering to dispose of effluent and drainage will need to buy the capacity from the local company or in the case of a large discharge get a licence and treat it itself.

    It won't be the north western water travelling to the south east, or the midland's effluent travelling to the south west or London for treatment.

    Of course the lack of income for the previous supplier will have to be made up somewhere, remember prices are regulated at the moment.

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  • The cost of water production aad distribution and wastewater treatment will remain the same. There may be a significant redistribution of costs from one consumer to another but overall the cost aill surely be the same. The claim to save £2 billion must therefore be just political hot air.

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  • So is this grid to be treated or untreated water? Who is going to decide the quality parameters? As has already been mentioned, it's more than just complying with the DWI standards. Mixing waters of very subtly different qualities can result in large quantities of solids settling out in the pipework over time. How will Severn Trent treat industrial effluent in Thames' region? They can buy capacity, but TW are likely to charge what it already costs them, with a small admin charge on top. Where's the saving in that? You can't split out flows from a common sewer! They could build a new plant next to the customer, but I guess that's always been a choice that the customer could have made for themselves. Trumpeted headlines, but no real change, except a bit of cherry-picking, I think.

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