WICS restates its approach to Scottish Water financing

Note (3 pages, PDF) by Sir Ian Byatt on behalf of the Water Industry Commission for Scotland (which he chairs) reporting on his examination of the question of whether prices could have been kept lower by assuming more borrowing by Scottish Water. The note is limited to a restatement of WICS' decision to set prices on the basis of the same financial ratios as are used by Ofwat for investor-owned companies in England and Wales, and appears to imply that Sir Ian believes that this approach provides a "hard budget constraint" on Scottish Water's management similar to the threat of special administration for a market-financed company. There is no reference to the actual constraints on Scottish Water's management.

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Filed under Price controls, Water, WICS.

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