News Shorts and Other Busyness

Water Profits and Prices Go Up

Squall 11, Autumn 1995, pg 12.

City forecasters predict that the privatised water companies are heading for a record profit of £2 billion this year.

The predictions, published in the monthly Estimates Directory, issued by Edinburgh Financial Publishing, show that £658 million profits were made in 1989/90, rising to £1.74 billion in 1994/95 and likely to be up to £2 billion by the end of the financial year in April 1996.

This rapid growth in profits has been brought about partly by an average 77 per cent increase in water prices, as well as a reduction of investment in the service. South West Water, which has the highest water rates in the country, cut its investment by 41 per cent last year. Since privatisation, investment in the service has amounted to only £13.5 billion, £9.5 billion short of the target envisaged by Ofwat, the government body set up to regulate the industry.