Government plans for upstream competition could endanger the environment, water industry representatives have warned MPs.
Proposals to open upstream activities to market forces could work against those to encourage collaboration, they told the Environment, Food and Rural Affairs select committee.
The heads of Anglian Water, United Utilities and lobby group Water UK called for a measured pace of reform to make sure the market incentives were right.
Water UK chief executive Pamela Taylor said: “In terms of the upstream part of the White Paper, we are in uncharted territory, so it is very important we work collaboratively.”
While incumbents have historically had a responsibility for safeguarding raw water quality in their catchments, she said, new market players might not feel the same sense of duty. “I am not ascribing to them unworthy business practices, what I’m saying is that any new entrant would just be responding to market incentives.”
Government needs to identify what works well in the current vertically integrated model and decide what to safeguard, Taylor added.
Anglian Water managing director Peter Simpson said it would be sensible to set up the Anglo-Scottish non-domestic retail market before getting into upstream competition. “Let’s start with something where we have got some experience, let’s all work together and get that right and then think about the next steps,” he said.
by Megan Darby
This article first appeared in Utility Week’s print edition of 16 March 2012.
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