Wessex Water Chairman Dr Francis Yeoh CBE has warned that renationalising the water industry will not lead to great savings or radical improvements to quality or service.
Dr Yeoh was commenting on the water company’s annual results for the year ended 31st March 2019 published this week.
Owned by YTL Power International of Kuala Lumpur, Malaysia since 2002, Wessex Water's 2018-19 financial results show the firm has continued to invest at record levels during the period, with more than £245m invested in maintaining and improving its assets.
Operating profit fell £6m (excluding exceptional items) to £228m. Turnover increased by £7m to £548m and operational costs increased by £8m to £213m (excluding exceptional items).
One of the major projects started in the last year is the second stage of the north Bristol sewer scheme – a significant engineering scheme that will accommodate economic development and housing growth by transporting waste water for treatment at the water recycling centre in Bristol.
Dr Yeoh said:
“We published our plans for the period 2020-2025 this year. In it we are clear that our underlying belief at YTL in stewardship and long-term commitment to the businesses we own will remain central to our approach in the future.”
This can only happen with the support of private investors. Renationalising the water industry will not lead to great savings or radical improvements to quality or service.”
“As a pragmatic business owner, my experience has convinced me that there is an alternative tothe traditional tax-and-spend policies of governments to meet the pressing need for new infrastructure. I believe the solution is to embrace the private sector to innovate and deliver new solutions to the issues we face."
Andy Pymer Managing Director of Wessex Water added:
“Under YTL’s long-term stewardship we have always been structured and financed in a simple and transparent way that ensures we are financially resilient. Our gearing will continue at under 70% and we will continue to maintain a straightforward corporate structure. We paid our taxes, contributing more than £60m last year in corporation tax, business rates and other taxes and are classed by HMRC as low risk.”
Regional water resources planning via West Country Water Resources group gained momentum
Wessex Water said its work with neighbouring companies and the Environment Agency on regional water resources planning via the West Country Water Resources group gained momentum in 2018-19. The group has developed a work programme to explore the most efficient use of water across company boundaries and is reviewing opportunities for new trading opportunities with Southern Water, supported by modelling and knowledge sharing.
However, while Wessex met its target for water saved through water efficiency promotion, average daily water use has increased to 147 litres per person, which is above target.
Commenting on operational performance, the final phase of the £25m Frome Valley relief sewer was completed in 2018 and is now available to redirect flows from Yate around the north of Bristol to the water recycling centre at Avonmouth. Design work and consultation for the Trym relief sewer is well underway – the £60m investment, which will be completed during 2022-23, will provide additional storage and conveyance capacity to the west of Bristol and facilitate new development.
The water company has also been delivering a programme to monitor overflows throughout the region by 2020 and has now installed event duration monitoring at 665 overflows, significantly ahead of the target of 498.
Wessex Water’s environmental investigations programme includes trials of novel techniques, such as at Sutton Bingham reservoir where radio frequency tags and time-lapse photography are being used to monitor sediment movement. The programme of investigations is intended to help better understand the regional environment and the effects of its business activities.
Commenting on Wessex Water’s carbon footprint, the report says that net greenhouse gas emissions fell to 118 kilotonnes carbon dioxide equivalent in 2018-19. This is the lowest annual operational carbon footprint since reporting began in 1997 and continuing a trend of reductions that began 10 years ago.
Electricity use fell slightly from 2017-18 but remained close to the longterm average, mainly due to energy efficiency work cancelling out increasing energy use caused by tighter water and sewage treatment standards, and the operation of the regional water supply grid. This year, 25% of electricity demand came from renewable energy generation on our sites
In its annual results the company had reported on how it worked hard to deliver the best levels of service and “continuously challenged itself to find better and cheaper ways of doing things”, Wessex Water said
Through the Wessex Water Marketplace initiative, the company is opening up company data, challenges and systems so that customers, stakeholders and suppliers can be part of the solution to future challenges.
During the past year more than £106m has been invested in environmental improvements, making greater use of catchment-based approaches to understand and manage nutrients in the environment.
This has involved partnering with farmers to offset nitrogen contributions as well as continuing to support catchment partnerships across the region, involving dozens of projects and partners and hundreds of farmers and landowners.
Among top performers on customer service
During 2018-19 Wessex Water remained one of the top water and sewerage companies in Ofwat’s service incentive mechanism, which measures customers service performance.
The company has also set itself the challenge of being both a top performer on Ofwat’s new measure of customer experience (C-MeX), and being in the top 20 UK service providers by 2025 on the Institute of Customer Service’s UKCSI survey.
In September, the Consumer Council for Water confirmed that Wessex Water still has the lowest number of complaints of the water and sewerage companies.
It also continued to deliver initiatives to support customers in vulnerable circumstances, with a 15% increase in the number of low-income customers receiving support with their bills or debt and a 15% increase in the number registered for Priority Services.