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Price review 2004
Final business plan reporting requirements In our forward programme we set out the information that would be required for the 2004 review:
We will also collect annual returns in June 2003 (submitted) and June 2004. Business plan The business plan is the key document from the company for the periodic review. It needs to be consistent with the general principles established by the periodic review process for 2004, based around the company's preferred strategy but with sensitivities to its key material assumptions. These key assumptions must be realistic and be set in the context of expenditure needs, the scope for efficiency and financing and bankability constraints. We commit to work from the business plan, reading, comparing, assessing, challenging and only substituting where there are good reasons to do so. The business plan should:
Each company's business plan should set out its preferred strategy for 2005-06 to 2009-10 and in the longer term in the light of the Government's final guidance on drinking water quality, environmental improvements and social issues. Companies need to ensure that they draw together all the major issues facing them into an integrated plan which is agreed and signed off by their Boards. We will closely analyse the business plans to inform our determination of price limits. As part of the process to increase the transparency of our decisions at draft determinations and final determinations we will share the data that we have used for setting price limits with each of the water and sewerage companies. We will also require additional information for JR04 to inform the assessment of the cost of historic fixed rate debt relative to our assessment of the appropriate cost of capital to be used at the 2004 periodic review. The information collected in JR03 will be used to establish the base position for each company for the review by providing details of the balance sheet position at 31 March 2003. We require the whole of the business plan to be subject to effective and focused scrutiny by the Reporter, and, where appropriate, by the company's Auditor. There have been a number of changes to the draft business plan reporting requirements, and these have been incorporated into version 1.0 of the reporting requirements manual for the final business plan. A schedule of changes showing the changes between the draft business plan and the final business plan is attached. Any amendments made to the reporting requirements since the 'working draft' was placed on the Ofwat website are shown in red text in the reporting requirements and in the schedule of changes. Companies are due to submit their final business plans to Ofwat on 7 April 2004.  |
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