Mar 17, 2021
Campaigners blast watchdog over returns to water investors
Consumer rights campaigners criticised the UK's competition regulator on Wednesday for allowing water companies to pay investors higher returns than rates proposed by the industry's own watchdog. The Competition and Markets Authority overruled Ofwat after four water companies launched the biggest appeal against their regulator in the 30 years since the UK handed regional water supply to private monopolies. The CMA set a headline rate of return of 3.2 per cent for investors over the next five years following the challenge by Northumbrian Water; Anglian Water; Yorkshire Water; and Bristol Water. The CMA decision comes as Ofwat seeks to respond to accusations that it has allowed water companies, now owned by a host of private equity, sovereign wealth and pension funds, to pay excessive dividends and executive remuneration while failing to invest in infrastructure. On average more than one in five litres of water taken from the environment every day by water companies leaks from the mains, while sewage outflows mean just 16 per cent of England's rivers, lakes and coastal waters are in a "High or good status", according to the EU Water Framework Directive.
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