Water firms lobby Ofwat over pricing

WATER companies are lobbying regulator Ofwat in a bid to convince it to relax plans for a strict pricing regime.<br /><br />The change could see the average yearly bill fall by &pound;14 before inflation to &pound;330 a year. <br /><br />Bosses from the firms met with Ofwat chief executive Regina Finn last week and pleaded for the proposals to be watered down before the final decision on pricing for the next five years is announced on 26 November. <br /><br />Ofwat shocked the industry in July when it published a draft ruling that water bills in England and Wales must fall in real terms by the end of 2015, making prices on average 12 per cent lower than the firms had been hoping. <br /><br />The water companies have told Ofwat that they would be unable to repair Britain&rsquo;s creaking water infrastructure &ndash; which dates back to the Victorian era in some cases &ndash; if profits were to fall.<br /><br />Analysts estimate that water companies have invested some &pound;80bn in water infrastructure since they were privatised in 1989.&nbsp; <br /><br />Water firms also say they would struggle to pay dividends to shareholders should their profits dip. They pointed to a report showing that three quarters of investors in the space have been put off by Ofwat&rsquo;s proposals.