The Department for Environment, Food and Rural Affairs has launched a new consultation on proposals to transfer ownership private water supply pipes to the water supply companies.
Defra is seeking views and evidence to further enhance its impact assessment on the policy options regarding future management of water supply pipes.
Private owners are generally currently responsible for the maintenance and upkeep of water supply pipes. According to Defra, in many cases these water supply pipes are not sufficiently maintained and repaired, creating an increased risk of failure for drinking water quality standards.
Estimates also suggest that 23%, some 770 mega litres per day2 of total leakage comes from private supply pipes.
Evidence suggests that there is a general lack of public understanding over the ownership and responsibility for water supply pipes. Defra said that water supply companies repair policies for private water supply pipes currently vary from company to company, creating inconsistency which further adds to public misunderstanding.
The Department has now put forward a proposal is to create a power which will allow future regulations to be made to transfer ownership of the portion of water supply pipes that are currently privately owned, to the water supply companies. Defra said that if introduced (via primary legislation), it could reduce leakage, protect water quality and help to ensure that water supplies remain resilient and sustainable for the future.
The impact assessment document does not specify any detailed figures setting out the estimated costs of a transfer. It does however state:
“WaSCs would take responsibility for upfront capital expenditure (capex) and annual costs of maintenance. Costs would be passed through to customers under Ofwat’s regulatory mechanisms. “
Funding of over £100m was allowed for communication pipe replacement and plumbosolvency control at the last price review. A UK Water Industry Research (UKWIR) report in 2009 estimated annualised costs from adoption of around £4/property/per annum in bill increases to the customer.
The impact assessment says that key costs will be upfront capital expenditure (capex) and annual costs to be borne by WaSCs, with capex in particular being highly uncertain at his stage – however, capital assets would allow WaSCs to claim a rate of return from any capex work.
Defra is planning to seek evidence on costs and benefits during the consultation process. Defra’s proposal would allow for secondary implementing legislation at a later stage with the costs and benefits being realised as a result of this secondary legislation - which would involve a further, more worked up, impact assessment.
Deadline for responses to the consultation is 4th July – click here to access the consultation document.