This item was published during the term of a previous administration that ended in April 2007
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Scottish Water's first annual report and accounts
06/08/2003
Scottish Water has made £30 million worth of efficiency
savings in its first year of operation, according to its
annual report and accounts published today.
The first report of the public water company since it
was established in April last year shows that it also
achieved improvements in drinking water quality,
environmental compliance.
Environment Minister Ross Finnie said:
"Scottish Water was established by the Scottish
Parliament to bring significant improvements to the quality
and efficiency of Scotland's water supply industry.
"The company's first Annual Report and Accounts
published today shows Scottish Water is beginning to
deliver on those challenges.
"We have reversed the trend of decades of
under-investment in our water infrastructure. We have also
made it clear to Scottish Water that massive investment
must be matched by real improvements in the way the company
delivers high quality water to its customers and protects
our environment.
"This significant capital programme began in 2002-03
with the investment of £350 million towards modernising
Scotland's water and sewerage infrastructure. That
investment has already improved drinking water quality and
wastewater treatment, environmental compliance and customer
services.
"Ministers have tasked Scottish Water to deliver
substantial efficiency savings by 2006. Already operating
costs have been cut by £30 million in 2002-03 - that is
£30 million pounds that customers don't need to pay
in charges each year.
"The report also shows there has been a successful
transition from the three former water authorities into
Scottish Water - a smooth changeover maintaining and
gradually improving services.
"This is just a start. By 2006 we expect Scottish Water
to have cut its operating costs by around a third, and to
have delivered a capital programme originally costed at
£2.3 billion for £1.8 billion - an efficiency of more that
20 per cent.
"While much needs to be done, Scottish Water can be
congratulated on managing one of the largest corporate
transformations ever seen in Scotland whilst delivering
real improvements to Scotland's water supply."
Copies of the first Annual Report and Accounts for
Scottish Water are available on Scottish Water's
website
Scottish Water are intending to host an annual
consultative meeting where the Chair and Chief Executive
will answer questions on the report on August 20 in
Dunfermline.
Scottish Water is a public corporation created in April
2002 from the merger of the three predecessor water
authorities: North of Scotland, West of Scotland and East
of Scotland Water Authorities.
Scottish Water is the fourth largest water operator in
the UK with a turnover of almost £1 billion and five
million customers. It operates within a regulatory
framework set up by Ministers and involving independent
regulators, the Drinking Water Quality Regulator (DWQR),
the Water Industry Commissioner (WIC) and the Scottish
Environment Protection Agency (SEPA).
Controllable operating costs of the three water
authorities were £380 million in 2001-02. Scottish Water
has been tasked with reducing these by around a third over
four years.
The Water Industry Commissioner will assess progress
towards this target in his annual Costs and Performance
report. These efficiency savings will ensure that future
charges and levels of customer service are comparable with
those in England and Wales.
Ministers consulted on the investment needed in the
water infrastructure, with input from the Drinking Water
Quality Regulator, the Scottish Environment Protection
Agency, the Water Industry Commissioner and Scottish Water.
The outcome was to agree a capital investment programme
(Quality and Standards 2) from 2002 to 2006, originally
costed at £2.3 billion.
The Water Industry Commissioner advised that through
achieving economies of scale from a merged Scottish Water
and using procurement as efficient as that elsewhere in the
UK, the programme could be delivered for £1.8 billion - a
saving of £500 million to customers.
During the Quality and Standards 1 period, from 2000 to
2002, the three water authorities invested almost £900
million. Scottish Water inherited the assets that were
bought with this investment, along with taking over the
debt of £2 billion.
Over the four-year period of Quality and Standards 2,
the Executive will invest further in Scottish Water to
fund this capital programme: £250 million has been made
available in loans for 2003-04, and up to £200 million each
year for the following two years.