OVERALL STRATEGY FOR THE AMP3 PERIOD AND TOP STRATEGIC OBJECTIVES
The Company's strategy for the AMP3 period (2000-2005) is largely dependant on the legal requirement to meet new drinking water quality standards after 2000 and the pressing need to improve the security of supply for customers which, due to the inadequate level of local water resources, has led to frequent water restrictions during the past decade.
Our strategy remains generally consistent with that being proposed when we extensively consulted our customers in 1998 although the extent to which new legal drinking water quality standards are now being implemented is considerably greater than we envisaged then.
Our customers have expressed a preference for price increases in line with inflation and a continuing capital investment programme aimed at improving security of supply, lower leakage levels, delivering higher standards of water quality and achieving environmental improvements.
The size of the proposed capital investment programme equates to approximately twice that which has been required between 1995 and 2000, 50% is to meet new legal drinking water quality standards which regrettably means that it is impossible to constrain increases in customers bills in line with inflation.
Additional pressure on customers bills is created by the increasing operating costs arising from the sophisticated treatment processes required to meet the more demanding water quality standards and the cost of purchasing water from neighbouring water companies to provide security of supply.
Against this background of increasing costs, the Company is not complacent and anticipates achieving continuing improvements in operating and investment efficiency and is promising to continue to deliver the extremely high levels of customer service and leakage reduction which has put the Company at the industry forefront in recent years.
The key elements of the strategy involve:-
- meeting new legal drinking water quality standards arising from tighter EC and UK regulations coming into force after 2000 by installing new treatment plants and replacing or renovating water mains and service pipes
- remedying the poor security of supply position by taking bulk supplies from neighbouring companies, laying trunk mains and installing treatment plant
- continuing to provide customers with a free meter option (a legal requirement after 2000)
- maintaining the condition and performance of our assets through a systematic planned replacement programme
- undertaking agreed environmental studies and improvements (e.g. alleviating low flows in the River Dour in Dover)
- minimising the inevitable price rises caused by new investment through improved efficiency and self-financing all levels of service improvement
Water & sewerage companies' business plans
