Water Wars to Cut Bills

Article excerpt

A new water company is mounting a multi-million pound challenge to smash Severn Trent's monopoly and cut bills by as much as pounds 68.

Aqua Resource Group wants to tap into the huge reserves of water beneath Birmingham to provide 90,000 city council housing tenants with "cleaner, more competitive water".

The company says the underground water could be used after undergoing a purifying process. It could then be pumped into people's homes using the Severn Trent pipe network.

Aqua claims it would sell water at 50p a cubic litre compared to Severn Trent's 70p a cubic litre, reducing bills by between 25 per cent and 30 per cent.

On an average Severn Trent bill of pounds 228 this could mean a saving of up to pounds 68.

Aqua's plans received the full backing yesterday of Ofwat, the water regulator's office, and the Department of Trade and Industry. Ofwat warned it expected Severn Trent to respond "positively" to Aqua's proposals.

Last night Aqua said the only block on the supply of the "cleaner, more competitive water" was permission to use the existing water-pipe network.

Negotiations between Aqua and Severn Trent have already opened and Ofwat says it is "an interested observer".

The arrival of a new supplier puts pressure on Severn Trent which has been criticised for its bosses' "fat cat" pay packets, high charges and aiming for a high share price.

An unidentified French water company is behind Aqua Resource Group and it is believed huge sums of money have been spent preparing the plan.

Aqua is planning to take water from supplies under Birmingham and feed it through Severn Trent's system into domestic and business premises.

"It would be necessary for users to have meters to measure their supply," said a spokesman.

Aqua has had the water carbon-dated which indicates it has been there for 20,000 years.

Severn Trent does not use the water because it says it is not of sufficient quality. It brings its supplies from Wales because it claims it is better.

A meeting between Severn Trent Water executives, led by managing director Mr Brian Duckworth, and Mr Ray Edmed, managing director of Pershore-based Aqua will be held next month.

Aqua must obtain a licence from the Environment Agency to extract the water and the area where it would be brought out would be a matter for local authority planning decisions. …