Ofwat update on capital maintenance planning (MD212)

Ofwat letter covering a UKWIR summary (7 pages, Microsoft Word) of a review of current practice under the common framework for capital maintenance expenditure planning developed by UKWIR following Ofwat's MD 161 letter in 2000.

The review suggests increasing reliance on bottom-up evidence of future expenditure requirements, thereby reducing the role of Ofwat's top-down assessment based on past expenditure and serviceability trends, and Ofwat promises that this will guide its future thinking. Ofwat also notes industry concerns that its approach to price control reviews "does not favour balanced consideration of capital and operating expenditure", and challenges companies to come up with "detailed examples" of where this has been a problem.

For further information or advice please contact Franck Latrémolière.

Filed under Ofwat, Price controls, Water.

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