Waterscan: brokers have ‘no place’ in the water market

Brokers have no place in the open water market, Waterscan has insisted.

Managing director of the water management company, Neil Pendle, told Utility Week he did not agree with water retailers that the brokering model is a low-cost method of acquiring new customers in the non-domestic water market.

“I think they’re completely wrong, brokering is not the option for this particular market,” he said. “I don’t think it’s appropriate, with low margins, that some of that margin goes to a broker. Frankly I’m not sure what value they add.”

Waterscan is a specialist water management consultancy, which offers commercial customers guidance on reducing their water usage.

Pendle said the company would never broker. “We’ve never thought that brokering was a good model,” he added. “I just don’t see the brokering model working at all. If it does, it will take margin away from both retailers and their customers.”

In September last year, the company became the first non-water-supplier to request a licence to operate in the business retail market, which will open to competition in April this year.

The company is still waiting to be granted its licence. Graham Mann, senior partner at H2O Building Services, made a formal objection to Waterscan being granted a licence, saying it would jeopardise the consultancy’s independence.

The application process for a water supply and sewerage licence typically takes about 60 days. This includes a 20-working-day consultation from the time an application is first received and a 40-working-day assessment period conducted by Ofwat. The application process may exceed this timescale in some instances.

A spokesperson for Ofwat said: “We’re in the final stages of processing those applications and we expect to make a decision in due course.”