The government has taken its first step in the direction of improving the water industry by introducing the Draft Water Bill in England and Wales this month to make it easier for new players to enter the water market and the existing ones to function faster and flexibly.
The bill proposed on July 10, 2012 suggests that a new entrant must be allowed to kick off business with a single window clearance from Ofwat, the monetary regulator of the UK’s water industry. At present a new entrant must get the approval of about twenty-one existing companies in order to start business. The twenty-one companies include water purification and sewage companies that rely on each other for their independent business in the industry. The bill, if passed, will cut down red tape and make Ofwat the sole mediator. The government aims to incentivise the water recycling industry with the money earned through the proposed measures.
The bill aims to achieves two main things for existing companies – enable mergers of water companies that has been stagnant by obstructive government policies at present, and allow water companies to easily switch suppliers. Efficient companies currently are being restricted by the law to overtake small or medium enterprises that could help enlarge their business. Draft Water Bill includes several reforms to tackle this issue. The second one on changing suppliers would enable speed in case a supplier is not able to meet deadlines.
If passed by the parliament, the act would be a relief to the water industry that had been struggling to meet rising demand from consumers. However, it would still take five more years for the industry to actually turn around. The Department of Environment, Food and Rural Affairs has roughly targeted the opening of the retail water markets in April 2017.