Our approach to the assessment of this application The new appointment and variation mechanism, set out in primary legislation, provides an opportunity for entry and expansion into the water and sewerage sectors by allowing one company to replace the existing appointee as the provider of water and / or sewerage services for a specific area. This mechanism can be used by new companies to enter the market and by existing appointees to expand their businesses. When considering applications for new appointments and variations, Ofwat operates within the statutory framework set out by Parliament, including our statutory duty to protect consumers, wherever appropriate by promoting effective competition. In particular, in relation to unserved sites, we consider that we must ensure that the future customers on a site who do not have a choice of supplier are adequately – – protected. When assessing applications for new appointments and variations, the two key policy principles we apply are that: customers, or future customers, should be no worse off than if the site had been supplied by the existing appointee; and Ofwat must be satisfied that an applicant will be able to finance the proper carrying out of its functions as a water and/or sewerage company. We clarified these two policy principles in February 2011 when we published our New appointments and variations and documents. In November 2012, we – published our This states that we will adopt a company-based assessment of ‘’. financial viability, rather than a detailed site-based assessment, where it is appropriate to do so. When we assess whether customers will be no worse off as a result of the appointment, we not only consider the customers on the site but also the generality of customers ie customers of the existing provider and customers more generally – across England and Wales, who in our view benefit from the effective operation of the new appointment and variation mechanism.
Our approach to the assessment of this application The new appointment and variation mechanism, set out in primary legislation, provides an opportunity for entry and expansion into the water and sewerage sectors by allowing one company to replace the existing appointee as the provider of water and / or sewerage services for a specific area. This mechanism can be used by new companies to enter the market and by existing appointees to expand their businesses. When considering applications for new appointments and variations, Ofwat operates within the statutory framework set out by Parliament, including our statutory duty to protect consumers, wherever appropriate by promoting effective competition. In particular, in relation to unserved sites, we consider that we must ensure that the future customers on a site – who do not have a choice of supplier – are adequately protected. When assessing applications for new appointments and variations, the two key policy principles we apply are that: customers, or future customers, should be no worse off than if the site had been supplied by the existing appointee; and Ofwat must be satisfied that an applicant will be able to finance the proper carrying out of its functions as a water and/or sewerage company. We clarified these two policy principles in February 2011 when we published our New appointments and variations – and documents. In November 2012, we published our ‘’. This states that we will adopt a company-based assessment of financial viability, rather than a detailed site-based assessment, where it is appropriate to do so. When we assess whether customers will be no worse off as a result of the appointment, we not only consider the customers on the site but also the generality of customers – ie customers of the existing provider and customers more generally across England and Wales, who in our view benefit from the effective operation of the new appointment and variation mechanism.
Proposal-to-grant-a-variation-of-appointment-to-Icosa-Water-Services-Limited-to-enable-it-to-provide-sewerage-services-to-a-site-called-Common-Road-at-Sissinghurst-Kent-1.docx