Consumers face higher bills in water upgrading

The consumer will have to bear most of the cost of meeting stricter European standards on water quality, according to the British industry. Companies were reacting to figures released yesterday by the European Commission, which showed that propos als to reduce levels of lead in water by replacing lead piping would cost water companies some £2.4bn.

Britain, with a comparatively extensive network of lead piping, would be one of the EU countries most affected, along with France, Ireland and Belgium, by an overall programme that would cost some £8bn.

"When companies are legally required to comply with the new standards, as they will be, then the extra expenditure will be passed on to the consumer, unless the Government provides a grant, which is most unlikely," said Michael Swallow, director of the Water Companies Association.

Ofwat, the industry regulator, said expenditure on this scale would require a revision of price limits. "It is far too early to talk about what this would mean for bills, but we have a duty to see water companies are in a position to finance whatever legal obligations they have to meet under new standards," said Dilys Plant, spokeswoman for Ofwat.

The Commission's figures understate the magnitude of the task, and the potential costs, by focusing on mandatory changes in the lead piping belonging to water supply companies. These pipes usually run from the mains to individual homes. But older houses are also full of lead piping, which would need to be replaced if the lead in water is to be reduced from the current standard of 50 micrograms per litre to 10.

"The critical issue is that however much the water companies do to their piping, it will be of little use unless households take out their lead as well, and then you are talking about big sums," Mrs Plant said.

The Department of the Environment has estimated that the total cost to households of replacing lead pipes - at anything up to £1,000 per home - could run to £5.5bn.

In a compromise formula, the Commission's proposals would be mandatory for water companies but voluntary for households. It suggests a 15-year period for full implementation, and expects governments to find ways of encouraging households to replace theirpiping.

Water companies broadly favour the drive to raise standards. The need for new piping is more acute in regions with soft water, such as the north of England and Scotland, where the acid eats more quickly into the lead.

The water authorities say lead content can be reduced to around 25 micrograms per litre simply by adding chemicals to make the water less "aggressive".

Over the past five years Britain's 31 water supply companies have spent £300m on replacing lead piping going into homes. Welsh Water said it spends about £4m a year on this programme.