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Water companies underspent by £1bn, says regulator

Water companies have been slow to start work on their £16.8bn, five-year investment programme, according to a new Ofwat report published yeseterday.
The 'Financial performance and expenditure of the water companies in England and Wales 2005-06' report reveals that companies have been slow in getting schemes off the ground. Total capital investment by the industry was only £3.4 billion compared with Ofwat's expectation of £4.3 billion.Philip Fletcher, Ofwat chairman, said: 'When we set price limits companies argued strongly that theyrequired more money to safeguard improvements to customer services and the environment. But they have been slow in getting the schemes started and face a stiff challenge if they are to meet all requirements by 2010.'We and our fellow regulators will monitor closely the continuing performance of water companies to ensure that they deliver fully the programmes which they accepted as part of the price limit package. Were companies to fail to deliver we would adjust price limits to make sure that customers do not pay for work that has not been provided.'

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