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Thames will not follow Ofwat's price regime

Chris Godsmark Business Correspondent
Thursday 30 January 1997 19:02 EST
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Thames Water was rebuked yesterday by Ofwat, the watchdog, for refusing to accept a demand to moderate price increases planned under the charging formula from April, writes Chris Godsmark.

Ian Byatt, the regulator, singled out 12 companies for failing to meet investment targets implied in the new price formula, which started in 1995-96. They all accepted his recommendations with the exception of Thames.

A spokeswoman for Mr Byatt said last night: "We are disappointed with Thames' response. We called them in for discussions because their spending on improvements didn't match the profile assumed in the price limits. However we can't force them to comply."

Thames can raise customer bills by 0.5 per cent above inflation this year, but Mr Byatt had asked the company to increase charges only by inflation.

The other 11 companies which complied with Mr Byatt's request have agreed to cut a total of pounds 35m off the price increases allowed for the year starting from April, out of total revenues of around pounds 6bn.

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