Dŵr Cymru Welsh Water is proposing a £3.1 billion investment programme for AMP8 - over £1 billion more than the investment made during the current 2020-25 AMP7 price control period.
Dŵr Cymru Welsh Water is proposing a £3.1 billion investment programme for AMP8 - over £1 billion more than the investment made during the current 2020-25 AMP7 price control period.
Writing in Welsh Water’s parent company Glas Cymru Holdings Cyfyngedig Preliminary Results 2023, Alastair Lyons CBE Chair of the Board says the increased investment will mean that
the company will not be able to achieve its aim of keeping increases in bills below the rate of general inflation. The water company has delivered on this from 2010 until 2021/22.
He goes on to explain that in order to deliver its long-term plan for the environment, in particular to avoid any ecological harm being caused to rivers by its assets, the company is projecting a cost in excess of £5 billion over the next 25 years. Accoring to Alastair Lyons, this will mean bills rising by around 5% above inflation every year of the upcoming 2025-30 price control period.
Commenting in the Chair’s statement, he says:
“It is up to society – our customers and the Government – to determine what we should aim to achieve on the basis of society’s priorities.
“The research we have undertaken with our customers tells us that they are prepared to have bills increasing if the money raised is invested in the right things, in particular to protect the environment, but how much they are prepared to spend on this has not yet been fully tested.
“The debate to date has been about substantially increasing investment, but only latterly are the balancing factors of the impact on bills and over what timescale should the investment be made
beginning to emerge. What we do know is that customers also expect us to seek to ensure our bills are affordable for all.”
Dŵr Cymru Welsh Water has published its annual financial results together with an Economic Impact Assessment from Cardiff University’s Welsh Economy Research Unit.
The assessment concludes the company contributes more than £1 billion to the Welsh economy each year and supports more than 9,100 jobs across Wales, 50% more employees, directly and indirectly compared to a decade ago.
Its Gross Value Added contribution (GVA - a measure of the true ‘worth’ of economic activity to Wales) has also increased more than 20% since 2013.
The report also highlighted growth in the company’s GVA and found that every £1 million of Welsh Water’s direct GVA is estimated to support a further £1.27 million of GVA elsewhere in the economy.
Having fully assessed the company’s impact on the Welsh economy, the report also concluded that not only does Welsh Water continue to be an anchor company within Wales, it also helps anchor other anchor companies in Wales.
The company's financial results for the year show that £400 million was invested in capital projects during the year. During the past 12 months the company has also confirmed deploying £113 million in additional funds made possible by its "not for profit" ownership model that, in some companies, would have been paid in dividends to shareholders. £13 million of the additional funding has been allocated to social tariffs and the remaining £100 million has been allocated to improve river water quality (announced in August 2022).
Describing 2022-23 as “a very challenging year for the company and a turbulent period for the entire sector”, Alastair Lyons,says:
“I am delighted to see the continued positive impact Welsh Water is having on the economy of Wales. As a company rooted in Wales, we are able to ensure the majority of our expenditure is retained in Wales, jobs are created locally and we are able to bring wider value – both economic and social – to the communities we serve.
“As we prepare our plan for the next price review, PR24, we are focussed on mitigating our impact on the environment, in particular the quality of our river waters, and on improving our service to our customers, reducing leakage and interruptions to supply and avoiding issues with the quality of the water we supply.”
Professor Max Munday of Cardiff University’s Welsh Economy Research Unit said:
"Dŵr Cymru continues to play an important role in the Welsh economy. Not only does it support employment but importantly it is the quality of employment that it directly and indirectly supports that does so much to bolster its contribution to the regional economy."
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