In his submission to the Independent Water Review Panel, which  is currently undertaking a comprehensive review of existing arrangements for the delivery of water and sewerage services in Northern Ireland, the Northern Ireland Utility Regulator has said property value should not be the main determinant in funding for water and sewerage.

Commenting on fair charges and the role of metering, Regulator Ian Osborne said

“ Charges based on the capital value of a consumer’s home bear only limited relationship to the actual costs imposed by that consumer on the water network, or to the quantities of water consumed.  Subjectively, we see little prospect of consumers accepting capital-value based charges as “fair”.” He also said that metering is not a panacea and that his office would be undertaking a consultation on the costs and benefits of water meters at the end of 2007.

The Regulator has put forward six key criteria against which reform proposals should be judged. These include the recommendation that water pricing policies must ensure an adequate contribution to the recovery of costs of water services from industry, households and agriculture by 2010 as required by the European Water Framework Directive. Mr. Osborne said

Funding arrangements must enable a long-term investment programme to be planned and executed to support environmental sustainability.  This means funding must be secured/ring-fenced at least 5 years ahead, within a 25 year planning horizon.”

The Regulator said that strong efficiency drivers were needed to bear down on the cost of providing water and sewerage services – necessitating strong efficiency incentives.  Among other issues he raised were the need to make entirely clear :the role of stakeholders - which risks, arid the costs arising from them, are to be borne by customers  and which risks are to be borne by government as shareholder. Mr. Osborne asked the Panel

“How will government find money to cover costs arising from these risks, without impact on consumers i.e. on tariffs or the investment programme?” and recommended that NIW should be permitted to borrow on public markets so as to ensure it can fully fund its investment programme without unnecessarily high tariffs.