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Ofwat to investigate proposed water price rises

The water companies have handed Ofwat a report which they believe makes perfect sense for them but will see water bills rising by 9% above inflation by 2015. This will add an average £355 a year to consumer bills before even taking into account inflation on top. So how can the water companies suggest such a package?

While the UK water supply industry may be one of the better ones in Europe the companies have been working for years to try and replace faulty and leaking pipes. This is a very slow process but it is also very expensive to complete with great sections of piping having to be replaced. Some of the UK pipes actually go back to Victorian times and are obviously in a state of disrepair.

Even though the water companies claim they do not expect consumers to cover the total cost of these repairs and improvements to the network, they suggest that part of the cost should be covered by increased bills. The main problem here is the fact that if bills are increased to cover this investment over the next few years they will never return to anywhere near the levels of today - so in affect the consumer will be paying a long term price for a short term investment plan.

Ofwat will be submitting its proposals in April 2009 and the final figures will be confirmed in November 2009.

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