Byatt warns of clampdown on water firms' dividends
Thursday 09 October 1997
His comments came as new figures showed the industry still falling behind its investment targets.
Ian Byatt, the director-general of water services, yesterday warned the privatised water companies that returns on capital would be stripped to "the minimum that investors demand to induce them to invest in the industry".
His comments, at a conference in central London, are the clearest indication yet that the price review he is preparing for 1999 will lead to a sharp one-off reduction in bills for the country's 23 million domestic water users.
Mr Byatt also indicated that water companies in some parts of the country might not be allowed to raise their prices in subsequent years - unlike the present regulatory regime which allows them to pass on the costs of heavy investment programmes to consumers.
"An initial reduction in prices is essential to this review. Otherwise companies would be left with high profits which could lead again to the argument that high profits could finance even more investment, and the complaint that instead of ploughing back profits, the companies had dissipated them."
He was speaking as Ofwat's latest report on capital investment by the water industry revealed that spending in the last two years was 14 per cent below the levels expected.
Although capital investment in 1996/97 was 22 per cent up on the previous year at pounds 3.2bn, a number of companies had not invested the amounts assumed when the current set of price controls were devised.
Although service to customers had continued to improve, the report shows that some companies had not invested sufficiently to improve standards of sewage treatment. Mr Byatt also said he was still concerned about whether dividends being paid to shareholders were sustainable.
"I will be resetting price limits in two years time and this report gives trends and pointers to the way ahead," he added.
- 1 What happens to your body when you give up sugar?
- 2 Ed Miliband less influential than One Direction's Louis Tomlinson by official Doncaster power list
- 3 Japanese island overrun with cats after population explodes
- 4 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
California teacher appears to have hanged herself in her classroom
The City of the Monkey God: Archaeologists claim to have found city lost for 1,000 years in remote Honduran jungle
Ed Miliband less influential than One Direction's Louis Tomlinson by official Doncaster power list
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...