Water chiefs fear tougher price cap

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The Independent Online
WATER COMPANY chiefs are growing increasingly concerned that the industry regulator will impose an even tougher price cap on them than expected, reducing their profits by a further pounds 250m a year.

They fear that when Ian Byatt of Ofwat (pictured) publishes his final price controls this summer, he will limit the water industry's return on capital to as little as 4 per cent. This would reduce the average household bill by a further pounds 8.50 on top of the pounds 40 cut Mr Byatt already envisages. But it would cost the industry between pounds 200m and pounds 250m in reduced revenues.