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Reports on water companies
International comparisons - water service unit costs: results for 2006-07 Key conclusions
Table 6 reports the water delivered unit costs results in pounds per property (£/prop) and pence per cubic metre (p/m3). Currencies have been converted to sterling using the Organisation for Economic Co-operation and Development purchasing power parities (PPP) exchange rates for the appropriate time period. Details of the PPP exchange rates used are given in table 1. The total average unit cost of water delivered is similar for England and Wales, Scotland and Australia on a £/prop basis. Australia performs better on a volumetric basis because it has a higher average consumption per property. Comparing the functional areas, the cost of operations and capital maintenance is higher while the return on capital is lower. Operating costs in Australia include ongoing maintenance costs. In 2006-07, Scottish Water's operating costs were £170 million below the level inherited from the three former water authorities in 2002. This is a 40% improvement over the past five years and has brought Scottish Water's performance in line with England and Wales. The Netherlands reports total unit costs for water delivered at the lower end of the range in England and Wales for £/prop but similar unit costs on a p/m3 basis. The average cost of operations is slightly higher than in England and Wales. This may be because of restructuring costs, which are not included in our operating costs. It also includes the high levels of tax the companies have to pay to extract groundwater and infiltrated surface water. The Netherlands' cost of capital maintenance uses depreciation at historic costs which gives lower values than the current cost depreciation used in England and Wales. Canada has the highest average cost of operations in £/prop. Higher consumption pushes up cost per property. Higher operating costs may also be because Canada treats relatively more surface water than other countries or because energy use is higher due to the colder climate. However, when considered on a volumetric basis, Canada has the lowest cost of operations as it has the highest consumption per property of the countries compared. The American cost of operations includes maintenance costs. However, this operating and maintenance cost does not include depreciation as most utilities do not depreciate their assets. Overall, the operating and maintenance cost per property is higher for the USA compared to England and Wales. High consumption pushes up cost per property but also lowers unit costs based on volume. Factors such as a relatively sparse population distribution may also increase unit costs on a per property basis.  |
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Unit costs |
Water service unit costs - results for 2006-07
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Sewerage service unit costs - results for 2006-07
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