Watchdog reprimands French companies

Paris - French water companies, including two which own railways and water interests in Britain, have been severely taken to task by an official watchdog for pushing up the price of water in France, writes John Lichfield.

Compagnie des Eaux, which owns several small drinking water companies in the UK as well as two rail franchises, and Lyonnaise des Eaux, which owns Northumbrian Water and North East Water, are among public and private operators accused by the official auditor of collusion and poor management.

The Cour des Comptes (court of auditors) says the steep rise in water prices - around 80 per cent in six years - since the industry was part- privatised cannot be justified. Although the industry has been faced with large capital investments to meet stiffer EU quality standards, this spending alone cannot explain the increase in charges, the court says.

The water companies rejected the findings yesterday, saying that the Court report described an "historical" state of affairs, which had been corrected. The average price of a cubic metre of water in France is now Fr15.19, compared with Fr8.74 in 1990.