Byatt wants water pipes opened up to competition

New proposals to force water companies to open their pipeline networks to competition have been submitted to the Government by Ian Byatt, the water industry regulator.

In an interview with The Independent, Mr Byatt said yesterday he planned to use the Government's Competition Bill to promote so-called "common carriage," where competitors can gain access to water company pipes. The new Bill would give utility regulators and the Office of Fair Trading the power to intervene to ban anti-competitive behaviour.

"If a company were to unreasonably deny the use of its pipes that could be held to be a breach of competition," said Mr Byatt. Previous plans to connect pipeline networks of different water groups were unveiled by the last Government, but Mr Byatt said there were still "sitting on ministers' desks."

But Jeremy Bryan, managing director of Envirologic, the consultancy group which has pioneered water competition, questioned whether common carriage was the best way to achieve competition. "Some water company pipes are 100 years old and leak like a sieve. If you put high quality water in one end it won't come out that way at the other end."

Mr Byatt also said he expected to give the go-ahead to a landmark competition scheme by Enviro-Logic before Christmas. It would take over the provision of water and sewerage services to Shotton Paper in Wales, one of the largest newsprint producers, from Welsh Water.

Mr Byan, who has spent five years bombarding Ofwat, the water watchdog, with competition proposals, said he was ready to begin work on the scheme as soon as he received a "green light" from the regulator.

Mr Byatt also issued a warning to water companies over the next five year price cap, which he has already said will see a substantial one-off cut in customer bills in 2000. He said the most efficient water companies would face the biggest cut in revenues, which analysts have predicted will be at least 10 per cent.

"A company which has done well in the current five year period would have a big cut to benefit customers," said Mr Byatt, adding that in the following four years of the price cap the company would face a less stringent regime than inefficient water groups.

The regulator also made clear the principle of a one-off cut was not negotiable, despite demands by the Environment Agency that the revenues should be redirected to investment in environmental improvements.

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