Memorandum from the Drinking Water Inspectorate
(DWI)
BACKGROUND
1. It would be helpful if you could briefly
outline the role of the Drinking Water Inspectorate and its relationship
with the DETR.
The Drinking Water Inspectorate (DWI), although
part of DETR, operates as an independent inspectorate. Statutory
powers rest with the Secretary of State and the National Assembly
for Wales, but both the previous Conservative government and the
current government have delegated enforcement and prosecution
decision to the Chief Inspector. Please see Annex 1 attached which
gives a general background and describes DWI's operations.
2. What is the DWI's view on the overall structure
of environmental regulation of the privatised water companies
in terms of the roles of DETR, National Assembly for Wales, DWI,
the Agency and Ofwat?
There are distinct roles for each of the above.
Government establishes the policies and regulations on drinking
water and the environment. DWI and the EA enforce those regulations.
Ofwat, the economic regulator, determines water prices taking
into account the quality requirements. All those elements are
required and it is important that the quality and economic elements
are separate to establish an open debate on quality and cost to
avoid fudging of quality issues.
THE REVIEW
PROCESS
3. Please outline the DWI's contribution to
the Periodic Review Process, in particular the interactions with
regulators other than Ofwat.
Please see Annex 2 attached which explains the
DWI role in the process.
4. At present, there is no specific legislative
provision for the "quadripartite" process. Do you think
that the quadripartite process should be formalised? Are the respective
roles and remits of the participants sufficiently clear?
It is necessary for there to be a clear understanding
of the process and timetable at the outset. There is also a need
for reviews of that process at critical times in it. The "quadripartite"
process, as it has become known (albeit there are more than four
players) provides that collective communication. However, the
main work in the process takes place between two parties at a
time. DWI works with the water companies in defining and clarifying
requirements and agreeing programmes to meet statutory requirements,
and with Ofwat throughout the process in communicating those requirements
and programmes.
5. What in-house expertise does the DWI have
to assess the cost effectiveness of water quality improvements?
The drinking water quality improvements cover
only those necessary to meet regulations which in turn are largely
determined by the requirements of EU Drinking Water Directives.
There are no discretionary elements.
THE FINAL
PRICE DETERMINATIONS
6. What is the DWI's view on the final price
limit profile for 2000-05?
DWI has been advised by Ofwat that provision
has been made in the final determinations for all of the programmes
supported by DWI. DWI will ensure that those programmes are completed
to meet the regulatory requirements.
7. The DWI has expressed concern regarding
the proposed reduction in personnel by the water companies because
of a possible impact upon water quality. What are the DWI's particular
concerns in this area? Is there a danger that such job cuts will
result in a significant loss of technical expertise which may
have implications for water quality and perhaps even hinder maintenance
programmes?
How water companies are staffed and managed
is a matter for their management. The Chief Inspector's statement
was made as a warning that drinking water quality aspects must
not be compromised. In assessing future incidents DWI would consider
whether changes in staffing levels had constituted "a lack
of due diligence".
8. What are the key drinking water quality
improvements which the final price determinations will fund?
Requirements are company-specific, but generally
the key programmes related to cryptosporidium, lead and
the renovation of distribution system networks.
9. Do the final price determinations allow
the kind of investment that the DWI would like to see? Are the
timetable and proposed components of the quality programme in
line with what the DWI would like to see achieved within the next
five years? Does the quality programme go beyond the basic requirements
of legislative deadlines?
The items included in the quality-driven programmes
of work cover known statutory requirements. These will become
legally binding commitments. Since the announcement of the final
determinations, DWI has worked with the water companies to agree
the detailed programmes of quality improvements, many of which
have completion dates fixed by the EU Drinking Water Directive
implementation timetable.
10. In Raising the Quality the Government
advocated a more strategic approach to the maintenance of assets
in the 1999 Periodic Review (paragraph 130). Is this evident in
the final determinations? What is the DWI's view on the quality
of existing networks and treatment plants?
Following extensive investment since 1990 in
new processes to meet drinking water quality regulations much
of the treatment plant is in good condition. By the end of 2010
about £5.5 billion will have been spent on renovating approximately
a third of the distribution system network to meet drinking water
quality standards alone. There has been additional work dealing
with leakage. The important question is what is an appropriate
level of maintenance expenditure to continue to meet water quality
standards and other serviceability indicators, as these "catching
up" improvement programmes are completed. DWI is working
with Ofwat to develop a more strategic approach to measuring asset
performance. The aim is to have an effective methodology in place
for AMP 4. DWI also expects water companies to develop and implement
operations and maintenance management strategies to maintain water
quality standards.
11. Raising the Quality also refers to the
Government's longer term aim that all water and sewerage companies
should take a strategic approach to the maintenance of their assets,
including infrastructure assets (paragraph 131). In the case of
water supply systems the Government suggests that such an approach
might build upon the Pre and Post Rehabilitation Assessment system
pioneered by the DWI (paragraph 131). Could you please provide
some information on this system and its purpose.
Pre and Post Renovation Assessment (PPRA) was
introduced to ensure that the improvement programmes were adequately
justified and directed to the quality problems by priority, and
that the effectiveness of the work could be demonstrated. A full
description of PPRA is attached[1].
12. Ofwat has adopted a policy of "no
deterioration" in water and sewerage services in setting
the final price limits. Is DWI generally satisfied that such a
policy will ensure the serviceability of the infrastructure so
that we are not storing up problems for the future?
Please see response above to question 10. Over
the next 5-10 years (depending on the water company) major programmes
of rehabilitation to meet quality regulations will be completed.
It is important to ensure that adequate provision is made for
strategic maintenance of assets to maintain the quality of drinking
water supplies to customers.
1 Not reproduced here. See Information Letter 9/2000
at http://www.dwi.detr.gov.uk/regs/infolett/current.htm Back
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