Outlook: Competition is good for water

THE WATER industry makes some reasonable enough points in challenging Ian Byatt over his plans to introduce competition into the water industry. But as usual it has chosen the wrong issue on which to attack the regulator.

This is an industry doggedly intent on resisting change. It's had to be dragged kicking and screaming through every reform in its inglorious history. Every time something worthwhile is proposed, it puts up objections, warns of dire consequences and insists that it just cannot be done. The worst example of this mulish response to change was the industry's ridiculous campaign against the creation of the National Rivers Authority in the late 1980s.

Only the water companies could believe it would be possible to privatise an industry with all its public responsibility for protecting the water environment intact. And yet the industry attacked proposals to separate these functions and keep them in the public sector as unworkable and disastrous.

It seems to be adopting a similar stance on competition. Mr Byatt is apparently "opening a Pandora's box" simply by discussing the issue. Rural dwellers will see their water bills soar and all manner of nasty infections will spread around the country like wildfire.

What nonsense. Ofcourse a great deal more work needs to be done on the practicalities of so-called "common carriage" - the idea that each regional water company's pipes should be available for use by all the others. And ofcourse it is not nearly as easy to introduce competition into water provision as it is with telecoms, electricity and gas.

Even so, the concept seems to have much to commend it. One positive effect would be the creation of a national water grid, which though admittedly expensive to build, would at least help guarantee movement of water from low cost areas with surplus water to high cost ones with a deficit. Competition is always a good thing. It makes companies work harder for their customers and is the best guarantee of efficient pricing. There are no exceptions to this rule, not even with water.