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Third new household water supplier set to enter market

WATER SERVICES REGULATION AUTHORITY News Release (PN 26/08) issued by The Government News Network on 13 August 2008

A third new household water supplier is set to enter the water and sewerage sector in England and Wales after Ofwat today launched a consultation into proposed services for a site at Tidworth, near Andover.

The regulator is proposing to grant an inset appointment to allow Veolia Water Projects Limited (VWP) to supply water and sewerage services to the site, which comprises 600 civilian household and non-household customers, and 1200 Ministry of Defence properties.

Thames Water was granted an inset appointment in 1998 to become water and sewerage undertaker to the site. The site was originally within the supply areas of Wessex Water and Southern Water. As part of the sale of Thames Water Services Limited to Veolia in 2007, Thames Water has consented to transfer the Tidworth site to VWP.

Since the Tidworth inset appointment is part of Thames Water's regulated business VWP must obtain an inset appointment to become the new appointee. Ofwat is now seeking views on its proposal to allow the change of supplier.

Keith Mason, Ofwat's Director of Regulatory Finance and Competition, said today: "If this gets the go-ahead, VWP will match Wessex Water's tariffs, as Thames did before it. This arrangement will continue until at least 2014.

"Ofwat would monitor the performance of the company to ensure that customers would not pay more than they would if they had been supplied by Thames Water. VWP would also be subject to the same level of customer service requirement as all other water and sewerage companies."

Notes to Editors:

1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and sewerage services by allowing efficient companies to carry out their functions properly, and finance them.

2. An inset appointment is the route by which one company replaces another as the appointed water and/or sewerage company for a specified area. Following an inset appointment, the replacement water and sewerage company will have all of the same duties and responsibilities as the previous statutory water and sewerage company for the specified area.

3. There are three qualifying criteria for seeking an inset appointment.

a. For an area in which each of the premises of one or more customers is supplied (or is likely to be supplied) with not less than 50 megalitres of water in England (250 megalitres of water in Wales) in any period of 12 months. This also applies to inset appointments for sewerage services.

b. For an area which is not served by an existing appointed company - an 'unserved site'. This includes an area that may be currently supplied by unregulated or 'private' supplies with its own source of water. This criterion has to be met for both water and sewerage services included in the inset appointment application.

c. For an area where the existing appointed company consents to transfer that area to the inset appointee. VWP has applied under this criterion.

4. Comments must be submitted to Ofwat by 9 September 2008.

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