Chief Inspector raises important questions on the Kelda restructuring proposals - text of Michael Rouse’s statement at the Yorkshire customer service committee meeting held in Leeds on Thursday, 6 July 2000
I am pleased to have the opportunity of speaking at this meeting today as there are some very important questions about the Kelda proposals in relation to the regulation of drinking water quality. I should stress that my comments are limited to drinking water quality.
I have 3 concerns and they are as follows:
1. Drinking water quality regulations would be more complicated. It is the "Mutual" company as the undertaker, which would be the regulated company. Kelda, the operating company, would not have any direct regulatory responsibility but would be contracted by the Mutual to operate to meet regulatory requirements. DWI would continue to require:
- full access to sites for inspection;
- compliance data supplied on time to the required quality; and
- responses to enforcement action made within regulatory timetables.
It would be important that the regulatory information flow and response to DWI enforcement action would not be impaired - it would be unacceptable for, say, company lawyers to be arguing that ‘it is not in the contract’ or for there to be delays caused by arguments on who pays.
2. Only licensed water undertakers can be prosecuted for supplying water unfit for human consumption. In the Kelda proposals this would be the “mutual” and not the operating company. Kelda would no longer be subject to criminal liability for any operational failures, but DWI would need co-operation from operating staff in the investigation of incidents.
3. With the separation of asset ownership and asset operation, it is possible that maintenance could be neglected with a consequential impact on drinking water quality. For example, it would be important for there to be ongoing maintenance and rehabilitation of service reservoirs to prevent ingress of water from the surface which could result in bacteriological contamination.
I am not saying that my concerns over the drinking water quality regulation aspects necessarily make the proposals bad ones. I am saying that they are real concerns which would have to be resolved. Should the Kelda proposals, when taken overall, be considered to be beneficial to consumers, it would be vital that the license conditions provided for clear and unambiguous regulation so that appropriate penalties for failures would be possible. Maintaining drinking water quality and protecting public health is paramount. It would be unacceptable to consumers if DWI were unable to take effective enforcement and prosecution actions in their best interests.
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Updated 11 July 2001
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