Leader: One year out, signs are good for water market opening

“The opening of the retail market represents the largest single change in the water sector since its privatisation in 1989.” So says Alan Sutherland (p29), chief executive of Wics and the driving force behind much of the nascent market’s early preparation.

He should know. Sutherland was on hand for the market opening’s messy birth, when the legal, regulatory and management structure of the Open Water programme, which ran the opening, was overhauled twice in less than a year. First, the Treasury stymied Ofwat’s Plan A by refusing to classify its arm’s-length organisation, Open Water, as a private body. Then, Plan B went the same way when Sutherland and Wics’ leadership of the programme as an official delivery partner was vetoed by the Wics board amid concerns of the division of responsibilities with Ofwat.

Plan C, however, seems to be working out very nicely. The decision by several of the companies to set up their own private body, Market Operator Services Limited (MOSL), proved to be a lifesaver. While there are still significant concerns around data quality and other operational issues, go-ahead companies are already getting their strategic plays in place, with deals such as Severn Trent and United Utilities’ joint venture likely to prove game-changers.

Exactly one year ahead of market opening, the signs are good. Chances are the market will open on time, even if there remains some work to be done on 2 April. The sector is to be praised for its mature and level-headed approach to regulatory setbacks created by red tape, and despite the initial problems it can boast of a collaborative and proactive approach to meeting a challenge set by government. Of course, with domestic marketing opening now looming on the near horizon, the bigger challenge is yet to come.