IB 12/15 Ofwat consults on price for Tata Steel’s water supply from Dŵr Cymru

Ofwat has published its draft determination on the dispute between Tata Steel and Dŵr Cymru over the terms and conditions for the supply of non-potable water to Tata’s site in Llanwern, Wales under the Water Industry Act 1991.

Unlike most water customers, Tata and its predecessors have been charged for the supply to this site on the basis of a special agreement between themselves and Dŵr Cymru that originally dates back to the 1960s. However, when the latest agreement expired, the parties were unable to agree on the terms and conditions of a new contract. In autumn 2008, both parties requested that Ofwat determine certain terms and conditions including the price for the supply of non-potable water to Tata’s Llanwern site.

The draft determination sets out a price that is based on Dŵr Cymru’s costs to supply the Llanwern site. It also makes a provisional determination on several non-price terms of the agreement.

Richard Khaldi, Senior Director of Customers and Casework said

“Our draft determination makes sure that Tata is getting a fair deal for their water supply and that other Dŵr Cymru customers are not cross-subsidising Tata’s supply .

“This case raises issues of strategic significance for the water sector in England and Wales and we hope that by setting out our approach we will help other water companies and customers in similar disputes to reach agreement. So we encourage other large users, water companies and industry stakeholders to respond with their views.

Notes to Editors:

  1. Ofwat (The Water Services Regulation Authority) is the economic regulator of the water and wastewater sector in England and Wales. It exercises its powers in a way that it judges will protect the interests of consumers, promote value and safeguard future water and wastewater services by allowing efficient companies to carry out their functions properly, and finance them.
  2. Ofwat launched its investigation into Tata Steel and Dŵr Cymru’s special agreement in October 2008 t under sections 56 and 30A of the Water Industry Act 1991.
  3. Ofwat has previously consulted on a similar draft determination under section 56 of the Water Industry act 1991 between Iggesund and United Utilities. In this draft determination, we have taken account of the representations received on that previous draft determination.
  4. Media enquiries to Ofwat Press Office: Benedict Fisher on 0121 644 7642/7616 or [email protected]