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Private sewer adoption costs surprisingly low
The cost of adopting private sewers has come in below or at the lower end of expectations and largely been absorbed by water companies. That was the picture emerging from annual reports six months after the transfer of more than 200,000km of pipes into water company hands.
However, some water companies are contemplating an application to Ofwat for an interim determination of K (Idok) to allow them to raise prices.
Northumbrian Water said the number of customer contacts relating to the assets transferred last October was initially lower than anticipated but they were rising month on month.
The company said the price tag for private sewer adoption to the end of the 2011/12 financial year was £4.5 million for capital and operating expenditure combined.
"We maintain sound financial documentation to support a possible future claim for tariff increases in order to recover additional costs borne," the company said.
Southern Water said the number of incidents reported on the additional network was "significantly lower" than expected, which it attributed to low rainfall and low customer awareness. If the level of activity stayed modest, the company said it would not meet the "materiality threshold" for an Idok.
It said it would keep the case under review.
Thames Water said it would be examining the case for an Idok submission before September 2013 to recover its additional costs.
Welsh Water said reported blockages had doubled to about 2,000 a month since the transfer. The acquired assets accounted for an extra £3.3 million of capital investment and £3.6 million in operating expenditure.
Companies have also started transferring private sewage pumping stations, a process due to be completed in 2016.
This article first appeared in Utility Week's print edition of 3 August 2012.
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Source: Utility Week
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