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NI Water costs still 'too high' Cuts would not compromise service
(about 1 hour later)
People in Northern Ireland are paying too much for their water, a Stormont assembly member has said. The Utility Regulator has said the the cuts in spending it has proposed for Northern Ireland Water could be met "without compromising services".
The SDLP's Tommy Gallagher welcomed a ruling that Northern Ireland Water should cut its spending plans by £135m. Iain Osborne suggested savings of 11% and told the government-owned company more efficiencies are needed.
On Thursday, NI Water was told it must cut spending by £135m after the regulator studied its business plan for 2010-2013.
NI Water said it was considering the regulators proposals.
Mr Osborne said NI Water had experienced "decades of neglect whilst it was being run as a government department" and that it did not compare favourably to water companies in the rest of the United Kingdom.
"There is a huge gap. It is half as efficient," he said.
"The operating cost base is double the best companies in the UK. We don't expect it to snap instantly into being the best in the UK. It is going to be a long job of focused management attention.
"We are not proposing they do fewer projects, we are proposing they do more projects, but do them efficiently."
'Head start'
NI Water Chairman Chris Mellor said he realised there was a gap to be closed.
"NI Water was only set up as a company two and half years ago. Companies in England and Wales have had a 17 year head start," he said.
"We've made significant progress over the last two and a half years. We've delivered the best drinking, waste quality water ever last year in the history of Northern Ireland.
"We will have saved this year £1 in every £4 compared to the equivalent operation when it was run as a government service."
The SDLP's Tommy Gallagher welcomed the proposed cuts in spending.
Mr Gallagher, who sits on the Regional Development Committee, said there was a legacy of underinvestment in water but the cut was "good news" for consumers.Mr Gallagher, who sits on the Regional Development Committee, said there was a legacy of underinvestment in water but the cut was "good news" for consumers.
"The reason is not hard to find - 30 years of underinvestment in water and sewerage infrastructure," he said."The reason is not hard to find - 30 years of underinvestment in water and sewerage infrastructure," he said.
"This was the legacy left to our devolved institutions by direct rule.""This was the legacy left to our devolved institutions by direct rule."
Northern Ireland Water has been told it must cut its spending plans by £135m as part of an interim recommendation from the regulator after studying NI Water's business plan for 2010-2013. The Utility Regulators said its proposals would create a better service for consumers.
Iain Osborne suggested savings of 11% and told the government-owned company more efficiencies are needed.
If water bills were issued to the public, his recommendation would mean lower average household bills.
Just last month the company said it would spend another £1.5bn upgrading water and sewage systems over the next eight years, subject to approval by the Regulator.
Consideration
Mr Osborne said their plans were aimed at consumers receiving value for money in water and sewerage services.
"This would reduce the burden on the public purse and would also reduce the overall bill for Northern Ireland businesses by over £40m.
"But this is not just about delivering savings. It is about investing smarter and more efficiently to deliver services that everyone can have confidence in."
NI Water's Chairman Chris Mellor said they were considering the regulator's proposals.
"From our initial review of the document it is clear that the regulator is proposing very significant further reductions," he said.
"These appear to us to be very challenging indeed. We are not yet in a position to comment on the effects that these proposals would have on the business.
"However, the lower level of capital investment may be a concern in the context of the generation of under investment in Northern Ireland's water infrastructure."