Jonson Cox has remarked on the divide between listed companies and private equity in the water sector, praising the “full transparency” and “market feedback” offered by the former.
Speaking at Utility Week’s Investor Summit, Ofwat’s chairman pointed out that the three listed water companies – United Utilities, Severn Trent and South West Water parent company, Pennon – had outperformed the sector.
He added that all three had produced fast track plans at PR19 while “in the main, consortia-owned businesses struggled with the price review”.
“They were miles adrift on costs”, he added.
“I’d like to know what I should read into all those correlations. What should we read into all the appellants being privately owned companies – and three of them owned by consortia?”
Cox, who has led Ofwat’s agenda for greater boardroom transparency and battled investors over issues such as dividends and independent governance, was asked whether he would consider building advantages for listed companies into the regulatory regime.
He responded: “Clearly there is a usefulness to our regime of listed capital, which gives us full transparency and a lot more market feedback. Would we go so far as to give them an advantage? That’s a really interesting point. I would say the listed companies have done well and deservedly well under our regime.
“We will adapt if they all end up not being listed but it remains important to transparency.”
Cox also accused water companies of being “driven by nostalgia” and urged them not to “hark back to that distant past” but “turn 180 degrees and focus on the forward-looking provision of a public service under private capital”.