MID KENT WATER PLC A summary of our Business Plan Submission to Ofwat - April 1999
OVERALL STRATEGY FOR THE AMP3 PERIOD AND TOP 5 STRATEGIC OBJECTIVES The Company's strategy is to meet the expressed requirements of its customers as efficiently as possible. These can be summarised by the following objectives. 1. Ensure adequate and reliable supplies except under extreme conditions. This policy will be supported by offering free meters and reducing leakage to economic levels 2.Ensure highest quality water installing treatment where necessary 3. Renovating mains to eliminate discolouration and starting the lead pipe replacement programme 4. Maintain and improve levels of service especially reducing low pressure problems 5. Ensure all the Company's assets are maintained

PROPOSED PRICE LIMITS & EFFECT ON AVERAGE BILLS								TOP 5 QUALITY IMPROVEMENTS IN 2000-2005 PERIOD
		2000 -01	2001- 02	2002 -03	2003- 04	2004- 05		1. Install treatment to remove iron at key remaining stations
	Proposed Price Limit for water and sewerage services							2. Renovate 350 km of mains to eliminate discolouration
1	Proposed Price Limit (Water Service)	2.8	3.7	3.7	3.7	3.7		3. Commence lead pipe replacement
2	Average Household Bill (today's prices)	137.86	141.33	145.13	149.48	154.33		4. Install special treatment at two key sites
3	Average Household Bill paid	149.04	156.61	164.84	174.02	184.17		5. Reduce low pressure problems
1	Proposed Price Limit (Sewerage Service)
2	Average Household Bill (today's prices)
3	Average Household Bill paid

 

PROJECTED EXPENDITURE NEEDS			Annual average for the AMP3 period (£/property/annum)				WHAT IS DRIVING THE CHANGES IN BILLS			£
1	Total Operating Expenditure - annual average		82.63				Average household bill in 1999-2000			137.74
2	Total Capital Maintenance Expenditure - annual average		105.76				Less	(1) passing on past out-performance		(17.81)
3	Total Capital Enhancement Expenditure - annual average		28.52				Plus	(2) challenging targets for future efficiency improvements		(4.84)
								(3) the impact of improvements in water quality		12.41
RETURN CAPITAL								(4) improvements in service performance		2.76
Return on capital - (post tax) (%)			6.98%					(5) Maintaining security of supplies to all customers		7.77
								(6) Free meters option as required in Water Industry Bill		8.87
								(7) Legislation on banning disconnection		5.26
								(8) Security of supply obligation	2.18
								Average household bill in 2004-2005	154.33

For further information contact : Malcolm Bailey on 01634 873165