< Previous | Contents | Next >

Investing in Water Services 2006 - 2014

9 SUMMARY AND CONCLUSIONS

9.1 This consultation on the future investment programme for the water industry has provided information on the scale of forthcoming investment requirements and seeks views on priorities for industry on a scale that is affordable and deliverable. Clearly we cannot afford to invest in all of these issues and some tough choices will have to be made.

9.2 Quality and Standards III is taking a much longer and more systematic look at investment pressures on the water industry than has ever been attempted in the past. By looking ahead over a period of 8 years, it has looked across the whole period for implementation of various European directives, including the Water Framework Directive.

9.3 Since early last year, a range of working groups have been examining the investment requirements of different aspects of the Scottish water industry: drinking water quality, environment, capital maintenance, capacity requirements for new development and first time connection. These groups have now submitted their interim assessment of the investment requirements for 2006-2014, and it is upon these emerging findings that this consultation is based. The scale of investment requirements arising from this work, in particular those driven by legislative requirements, will undoubtedly limit the scope for public policy choice.

9.4 Action is underway to re-examine and prioritise possible expenditures against legislative requirements, and we would welcome your views through this consultation on how this work should be done. However, already there are some clear messages emerging from the work to date. These are as follows:

• it seems certain that significant investment will be necessary in the water industry for many years to come, on a scale at least equivalent to (and perhaps larger) than has been attempted in Quality and Standards II;
• the Executive will pay very careful attention to concerns about deliverability and affordability in arriving at its final requirements for Quality and Standards III, but the extent of the pressures is such that water prices will, in all likelihood, have to rise to accommodate an increase in investment;
• significant investment will be required to maintain infrastructure in its present condition (failing which, service to customers will deteriorate);
• further investment will be required to meet new drinking water quality standards;
• we face particularly difficult choices as regards investment in the environment;
• accommodating the demand for additional capacity arising from economic development will require the costs to be shared with developers; and finally
• other pressures such as dealing with odour from sewage works, foul-flooding, and low water-pressure can probably only be accommodated at the expense of further additions to water charges.

9.5 We have deliberately undertaken this consultation at an early stage in the process of refining investment scenarios to allow a wider engagement on the issues and the input of views at a point when they will be most influential. We hope you will take up this opportunity to provide us with your comments.

< Previous | Contents | Next >