That is tough enough. But Ofwat is also insisting that any scope for real dividend increases from the core water businesses after 1995, when a new water pricing regime will be introduced, must come solely from efficiency gains.
The key point is that Ofwat will allow no free lunches in water pricing, beyond what is strictly needed to meet environmental requirements. Real dividend growth must come from diversification outside water. Only Wessex Water has succeeded in this task so far, a sobering thought for water investors.Reuse content