Brussels directives to push up water bills

Water bills could rise by as much as a third to meet the cost of implementing new European Union directives, the head of the water-consumers watchdog warned yesterday.

Jim Gardner, chairman of the Ofwat national customer council, said the three directives under consideration in Brussels had enough financial clout to make it inevitable there would be a "substantial impact" on customer bills.

The average household water bill is currently pounds 218. The industry will be allowed to increase charges by an average of inflation plus 1 per cent for the 10 years to 2005 to meet an investment programme already expected to cost pounds 24bn

Under the draft revised drinking water directive, water companies may have to replace all lead pipes over a 15-year period, at a cost of some pounds 2bn. This would add pounds 5 to the average domestic bill.

Proposed revisions to the bathing water directive would replace guidelines on water cleanliness with mandatory targets requiring heavy additional expenditure on sewage treatment, an Ofwat spokesman said. The third directive is an entirely new one covering demand and supply, security of supplies and measures needed to avoid droughts.

Mr Gardner said it was not yet possible to cost this directive accurately. However, he pointed out that when the urban waste water treatment directive was introduced it added pounds 44 to domestic bills. This figure was subsequently reduced to pounds 23 through efficiency improvements.

The water industry expects to spend pounds 2.8bn a year between 1995 and 2000 and pounds 1.98bn a year from 2000-2005 to meet environmental standards under current EU directives.

Mr Gardner said that the voice of water customers must be heard in Europe before any new directives were finalised.

"We need to ensure proper and genuine consultation on this major tranche of proposed measures, and to see that their impact and effectiveness is correctly costed and the resulting charges implemented at a pace with which all customers, both business and household, particularly those on low incomes, can cope," he said.

Mr Gardner was speaking as the Ofwat customer council published its annual report praising the decision by a number of companies, including North West Water, Welsh Water and Wessex Water, to appoint non-executive customer directors.

Three of the four companies in the east of the country had also agreed to adopt a binding mediation and compensation scheme under which the Ofwat customer service committee decides levels of payment.