This hardly amounts to damning evidence of malpractice, and the water companies rebut categorically accusations that they have "syphoned money" from their regulated businesses for the benefit of their non-regulated subsidiaries.
Much is made of the companies' limited resort to competitive tendering when a subsidiary bids for business from its regulated associate. Yet competitive tendering is only one of four methods of market testing recommended in Ofwat's current guidelines, with no view expressed as to which the regulator prefers. All the water companies have routinely followed one or other of these practices.
Director, Water Services Association
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