Anglian Water attacks Byatt for price cut

ANGLIAN WATER yesterday launched a scathing attack on the industry watchdog Ian Byatt, saying that his price-cutting plans could halve its profits and put its capital expenditure programme at risk.

Robin Gourlay, chairman of the privatised water company, said proposals by the regulator Ofwat for a 17.5 per cent drop in its average bills from 2000 - published in a consultation paper last week - were "undesirable".

Anglian Water faced the heaviest drop in prices in the sector and would "argue forcefully" for a change to the proposals. However, Anglian's broadside against Mr Byatt was dealt a blow when Thames Water, the UK's largest water company, criticised its rival's aggressive approach.

Sir Robert Clarke, the Thames chairman, said that although the London and South-east-based company faced cuts of 10 to 15 per cent and agreed with the substance of Anglian's comments, it did not want to be embroiled in a public row with Mr Byatt. "We believe the right way to handle this is to engage in private discussions with the regulator," Mr Clarke said.

Anglian Water claimed that the cuts proposed by Ofwat would wipe about pounds 130m from its profits and turnover in 2000 and 2001. Last year, the company, which has about 5 million customers between the Thames and the Humber, posted a pre-tax profit of pounds 274m.

Chris Mellor, the group managing director, said that because of the high level of fixed costs, Anglian would not be able to offset the drop in revenues through greater cost savings for at least two years.

The collapse in revenue would severely impact interest cover and would make it difficult for Anglian to borrow to finance its investment in pipes and leak-reduction systems.

"[Mr Byatt's plans] could have some particularly serious implications for the company," said Elliott Mannis, the finance director.

The company will argue that the proposals would lead to a jump in prices after 2000, wiping out the benefits to customers of the initial cut. Anglian is to push Mr Byatt, who will publish a five-yearly price review in 1999, to accept a lower one-off cut in 2000 and smaller price increases after that.

The comments came as Anglian posted a 20.3 per cent fall in interim profits to pounds 112.8m and admitted that it would not meet Ofwat's leakage target of 205 million litres a day in the current year.

Thames Water, which serves around 12 million customers, posted slightly higher interim earnings of pounds 207m before exceptionals. Shares in Thames rose 3p to 1,124p. Anglian dropped 15p to 842p.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Fans hold up a scarf at West Ham vs Liverpool
footballAfter Arsenal's clear victory, focus turns to West Ham vs Liverpool
New Articles
i100... she's just started school
ebooksAn unforgettable anthology of contemporary reportage
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam