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Ofwat chair Jonson Cox has dismissed fears over the financeability of water companies in the wake of PR19.
Speaking at Utility Week’s Investor Summit he accused companies of using the threat of credit rating downgrades to put pressure on the regulator.
He said: “As we head into a price review, what happens, I believe, is that managements use credit rating agencies as a tool to try and tell us just how difficult the review is going to be for them.”
Cox’s comments followed recent downgrades of companies both accepting and challenging Ofwat’s final determinations.
He added: “I would remind you, we are still in credit rating territory. We have not seen some of the dire scenes threatened actually emerge.”
He was speaking as the regulator revealed the results of its investor survey, which found that 41 per cent of investors do not feel that Ofwat is listening to them (compared to 29 per cent who do and 30 per cent undecided).
The survey showed a year-on-year fall in Ofwat’s maximum score on all metrics except independence of government.
Cox noted that tensions were always likely to be higher at the end of a price control period.
The breakdown of responses by investor type showed listed equity significantly more likely to approve of Ofwat’s approach than debt or private equity backers.
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