Big water users probe standards of service

24 February 2000
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24 February 2000 | David Arminas

The Utility Buyers' Forum (UBF) has launched a major survey of some of the UK's heaviest water users to assess the standard of service provided by water companies as the market becomes increasingly competitive.

Competition is well established in gas and electricity markets, said a UBF spokesperson, but with water, many customers seemed resigned to accepting what the water companies offer.

"We are fighting to achieve cheaper prices for commercial and industrial customers through competition," said Chris Lewis, UBF's water adviser and chairman of CIPS's energy committee. "Competition exists for large customers. Buyers need to be proactive and exploit the opportunities."

The survey's questions include attitudes towards competition, moving suppliers, and customer satisfaction, as well as efficiency and water quality.

The survey comes at a time when the regulator Ofwat hopes the introduction of the Competition Act on 1 March will lead to more competition for customers, and more customers seeking better deals.

Under the act, Ofwat has greater power to rule on anti-competitive practices, such as one supplier refusing another permission to use its pipe networks. Fines for such behaviour could be 10 per cent of a company's UK annual turnover.

UBF members include 100 of the country's 500 largest water users (a large user has a consumption of 250 megalitres or more a year), and large users of gas and electricity. The questionnaire was sent to 1,000 companies, and the results are expected in June.

A Datamonitor survey last summer covering 100 of the UK's largest users found that 90 per cent of companies would switch suppliers on the grounds of cost alone. Three-quarters also believed that water management services should be separated from a supply agreement.

"In general, customers believe it is against the supplier's interest to reduce consumption," said Andrew McKechnie, a Datamonitor consultant. "They want the freedom to separate the two."

Andrew Jessop, managing director of Hartlepool Water, a wholly owned subsidiary of Anglian Water, said water companies will retain large water users only by offering better management services. He also cautioned against switching suppliers on price grounds alone. "Be aware of hidden on-site costs," he said.

Inset appointments, which allow a change of supplier, have been on the statute books for 11 years. Ofwat has approved six of them, and Anglian Water provides water to four.


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