Ofwat upholds complaint against Affinity Water

Ofwat has upheld a complaint against Affinity Water over a payment to a self-lay provider (SLP) for a residential property development.

The complaint, which was received by Ofwat in August last year, concerned Affinity’s decision to exclude excavation and reinstatement costs when calculating an asset value payment to the unnamed complainant in 2016.

The complainant argued these costs are “reasonably incurred” when installing water mains and, as such, are required to be included in calculation.

Affinity Water, by contrast, said they are “wholly exceptional” in instances where water mains are being installed at a development site and can therefore be excluded from the calculation. It claimed water companies are not legally obliged to conduct excavation and reinstatement if the site developer has agreed to undertake this work itself.

But in its final determination released yesterday (5 August), Ofwat said this position is incorrect. If excavation and reinstatement work is required to install a water main, then this can be carried out by the developer, the SLP or the relevant water company.

If a developer chooses not to carry out these activities, either itself or through an SLP, then the water company is required to do so, the regulator added.

Ofwat concluded that the disputed costs for excavation and reinstatement should therefore be included in the asset value payment to the complainant.

The regulator additionally determined that Affinity was correct, however, to exclude non-contestable costs such as design, site visit and audit costs, from the calculation.

Affinity Water has 20 working days from the final determination in which to provide the complainant with details of its final calculation of the asset value payments associated with all four phases of the site.

The company has yet to respond to a request for comment.