IB 08/16 Ofwat invites NAV market tenders

Tuesday 15 November

Ofwat has today issued an invitation to tender for consultants to assist us in investigating how the market for New Appointments and Variations (NAVs) is working.

The NAV system allows developers and large users to choose their monopoly supplier of water and/or wastewater services. It was introduced to provide a mechanism to enable new entry into the sector and to allow those already present to expand into other geographical areas.

However, while NAV applications have increased in recent years, the scale of the market is still modest. To date, eight new appointees have entered the market and 68 NAV sites have been granted – mainly for new residential and mixed use developments.

We have made a number of changes to our NAV policies and processes in recent years to improve the effectiveness of the market. However, stakeholders continue to express concerns about the operation of the market.

We are therefore planning to use our powers (under section 27 of the Water Industry Act 1991) to review this market.  This will enable us to investigate any issues in the market; to consider the extent to which current initiatives and policy developments may help to address these issues or to identify other areas where it may be appropriate to intervene using the full range of our regulatory tools, including our concurrent competition law powers.

We anticipate that the majority of the information gathering and analysis will be completed during the first quarter of 2017 and we will be engaging extensively with stakeholders to ensure that the investigation is as comprehensive and robust as possible.

The tender process for this requirement was let under the Ofgem Framework Agreement for Economic, Financial and Related Consultancy Services, between the Gas and Electricity Markets.  Of which only Suppliers on Sub Lot:  3F – Market Design (UK & International) can tender.

Notes to editors

Media enquiries to Ofwat Press Office on 0121 644 7642