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The water supply and sewerage licensing process was “made for incumbents” and could be discouraging new entrants from applying to enter the market.
Jacob Tompkins – co-founder of new entrant The Water Retail Company, which has applied for a licence – told Utility Week there the process was “laborious” and “a lot of it was written for the incumbents”.
“It has not been written with new start-ups in mind,” he said. “It’s written in water-sector-ese, and could be confusing if you were coming in from outside the water sector.”
“That is not a complaint,” he added. “After all, there are more incumbents than there are new start-ups.”
Lord Redesdale – the company’s other founder – said he and Tompkins had found the process of application relatively easy because they have “a lot of expertise”. However, “a lot of companies will find it quite tricky”.
“That’s why companies you might expect to enter the marketplace – such as energy companies – will wait and buy other companies that are already there,” he added.
In response to these comments, a spokesperson for Ofwat told Utility Week: “This is a regulatory document, so may be complex in parts. However, both Ofwat and MOSL have run a number of meetings, events and workshops over the past few months to help aspirant applicants, by providing support and guidance in this area. These will continue to run over the next few months.
“Our intention is that the application process should be thorough but not overly burdensome. The requirements as set out in the application form and this guidance ensure that prospective licensees know that they must prove they are fully competent in all areas before we will grant a WSSL.
“The fact that there are new entrants applying for licences is evidence that the process isn’t preventing organisations applying.”
The Water Retail Company applied to Ofwat for a water supply and sewerage licence in November 2016. In its application, the firm said it will offer “highly competitive pricing for water and sewerage services”.
Redesdale will be the company’s chair and acting chief executive, and Tompkins will become chief technology officer once he has left Waterwise – of which he is managing director – in March.
Read the full interview with Redesdale and Tompkins in the 27 January issue of Utility Week and online.
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