Letter: Sewers policy defies logic

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THE STATEMENT by Ofwat's

Director-General, Ian Byatt (Letters, 24 April), denying underspend is not supported by the water companies' published accounts, in which auditors note: 'The infrastructure renewals expenditure provision represents the unexpended balance of the profit and loss charge.' At March 1993, the unexpended balance was was pounds 278.8m.

Our members have made substantial investment decisions based on Ofwat's assurance that the shortfall we identified would not be significant by March 1995, hence our astonishment at revelations that an accrual of pounds 424m had been agreed before privatisation with government and that recent agreements allowed this to run into the 21st century.

Britain led the world in development of its infrastructure assets, and the inventiveness of our industry has until now placed us as international leaders in no-dig renovation techniques. We know that the rate of dereliction of underground assets exceeds the rate of renovation and that the recession has produced the lowest renovation costs since 1988.

Our members trade in the competitive sector, where operating profits of 5 per cent are good and where losses can occur. The regulated water companies, as monopolies, produce average operating profits of 34 per cent. Essential renovation schemes remain under continual deferment and an increasing underspend at this time defies logic and betrays the engineering skills and foresight of our forebears.

Chris Rees

Secretary

Sewer Renovation Federation

Langport, Somerset

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