Isra-Mart srl:Businesses face five per cent hike in water bills

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Isra-Mart srl news:

Businesses will face a hike in water bills of around five per cent over the next year, according to new figures from industry regulator Ofwat.

The watchdog confirmed late last week that household water and sewerage bills in England and Wales for 2011-12 will rise by 4.6 per cent, meaning the average bill will increase roughly in line with inflation to £356 a year.

Average bills for businesses are harder to quantify as all firms are metered and many negotiate contracts with utilities on a case-by-case basis. However, a spokesman for Ofwat confirmed the average increase in charges for non-household customers for next year will stand at around five per cent, fractionally above the November RPI inflation rate of 4.7 per cent.

The watchdog said the final price settlement was around 10 per cent lower than the figure requested by water companies – a decision that is bound to spark fresh concerns across the industry that it could struggle to fund the necessary increase in investment in flood defence and climate adaptation projects.

The price settlement also includes plans for water companies to meet strict new water efficiency targets that require them to increase metering and reduce leakage with a view to saving 100 billion litres a year by 2015, as well as proposals that will see the industry step up investment in renewable energy projects and river protection.

"No one wants to see bills increasing, particular in tough economic times," said Ofwat chief executive Regina Finn. "When we set limits on prices, we listened to customers and challenged companies hard. That's why average bills are set to remain broadly in line with inflation up until 2015, while companies are investing more than ever before, £22bn."

However, the five per cent hike in non-household bills is still expected to intensify pressure on businesses to invest in improved water efficiency measures.