What is a NAV?
New appointments and variations (NAVs) are limited companies which provide a water and/or sewerage service to customers in an area which was previously provided by the incumbent monopoly provider.
A new appointment is made when a limited company is appointed by Ofwat to provide water and/or sewerage services for a specific geographic area.
A variation is where an existing appointed company (an “appointee”) asks Ofwat to vary its appointment so it can extend the areas it provides services to. A new appointee has the same duties and responsibilities as the previous statutory water company.
A NAV, therefore, involves one company replacing another as the appointee for a specific geographic area.
NAV’s provide competition in a market which is inherently monopolistic. This can provide a number of benefits for society, end-customers and developers. The benefits include serving a site at a lower cost, facilitating multi-utility developer service and encouraging innovation.
8 new appointees have entered the market, serving over 80 sites and around 61,000 residential customers. A list of the NAV appointees can be found here.
The scale of the market is relatively modest. Because of the wide range of benefits NAVs provide, we are actively encouraging an effective market through evidence-based policy. We have published a number of policy initiatives and documents with this aim, they can be found in the NAV publications section.
The picture below illustrates how a new appointee’s area of appointment could relate to that of existing appointees.
For further information, please consult our table of relevant NAV publications.