Letter to the Corporate Finance Advisor,
Ofwat, from the Chairman of the Regulation Group, Water UK
FINANCIAL MODEL
RULE BOOK
Thank you for your letter of 2 October. My colleagues
and I were disappointed that you saw little merit in cross-checking
our respective financial models and we found the reasons for your
position uncompelling. This is surely inconsistent with the open
and transparent process that the Director General is promoting.
Having read the Rule Book, some areas would certainly benefit
from a full cross-check of our respective models.
In the coming months, Ofwat and the companies
face a number of critical meetings at both working and Director
level. Many key issues need to be addressed in the context of
their financial implications and impact on bills. Much time and
effort could be wasted if the parties at those meetings have a
different understanding of those impacts.
We therefore wish to proceed with the proposed
cross-checking exercise and I enclose a test data set for you
to run through your model. It would be helpful if you would return
the results to me by 2 November so that any issues can be addressed
prior to companies' working level meetings.
20 October 1998
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