Speaking to City analysts after the announcement of Pennon’s half-year results, Ken Harvey spoke out against the regulator’s approach in implicit criticism of chief executive Regina Finn.
“As a longstanding utility man, I am so frustrated that we have got the position that we have because it is, in my judgement, totally unnecessary,” said Harvey.
“Along with virtually everyone else, we have said that we find Ofwat’s current proposals unacceptable. My concern is that after months and months and months of negotiation, the Ofwat team don’t seem to have been prepared to change tack very much.”
The industry veteran’s remarks reflect widespread alarm in the sector over the risk Section 13 could lead to higher finance costs.
Harvey said: “We are left with a position where the proposals would seriously put the company at risk, with concerns for both equity and debt investors that will almost certainly lead to higher costs that will ultimately be reflected in higher bills for customers. That can’t be right.
“My own view is that a solution will only happen if there is a fresh approach from Ofwat. They do have an opportunity because a new chairman has just arrived, who is not encumbered by all the past discussions. I think Cox has an opportunity to lead the process and find a solution that is acceptable to all of us.”