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Wessex to franchise water supply

WESSEX WATER is planning to award outside contractors long term franchises for running its water treatment and supply networks.

Doing this could inject more competition into the water sector and make it more efficient, said chairman Colin Skellett.

Speaking at last week's Institute of Economic Affairs Water 2000 conference, Skellett called for Britain to adopt similar franchises to those operating abroad.

'The current UK system is inefficient, ' he told NCE, 'It's getting to the end of its life in its present form if we want to increase competition.

'Competition can be increased in two ways - by common carriage, which has a number of problems, or by splitting a company into separate asset and operating companies, under a franchising system, ' he said.

If the water regulator accepts the plans, Wessex Water will split into two companies. One would hold water distribution and sewage treatment licences.

The other would be an operating company responsible for maintaining and operating the company's water and sewerage infrastructure.

Wessex's plans are still in the early stages. Its announcement followed news that Kelda was also planning to restructure by separating its assets from its operations.

Kelda is planning to sell its assets - worth an estimated £2.4bn - to a non profit making, customer owned company.

'The new Registered Community Asset Mutual company will involve about 160 employees, mainly in capital planning, ' said a Kelda spokesman. 'They will not directly maintain the assets, but contract it out to a business services contracting company.'

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