Issues for South East Water/Mid Kent Water merger inquiry

Competition Commission statement (3 pages, PDF) of the issues that it intends to consider in its inquiry into the South East Water/Mid Kent Water merger.

The Commission intends to study the levels of expenditure, quality of service and "any other relevant measure" of these companies in order to "consider ... whether South East Water and/or Mid Kent Water are currently among the most efficient comparators" and "the likelihood of South East Water or Mid Kent Water becoming among the most efficient comparators in the absence of the merger either under the existing comparative competition framework or any likely alternative model".

It will also consider "the number and characteristics of companies required for the effective operation of the existing comparative competition framework" and possible "alternative methods of comparison" that Ofwat might use, and find out whether the loss of a comparator could lead to "reducing the incentives on water companies to achieve cost savings".

The inquiry will also consider whether "the merger might give rise ... to a lessening of competition", albeit seemingly only as part of the overarching question of whether "the merger may be expected to result in a prejudice to Ofwat's ability to make comparisons between different water enterprises".

The next response deadline is Monday 15 January 2007.

For further information or advice please contact Franck Latrémolière.

Filed under Competition Commission, Merger control, Water.

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