Water operator warns over future

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The operators of Welsh Water say its whole future could be put under threat if plans for competition in the industry are brought in.

Glas Cymru says it could ultimately mean higher bills for Welsh customers.

BBC Wales has learnt that Glas Cymru, which is responsible for Welsh Water, has been lobbying to be excluded from the proposed shake-up.

However, UK and assembly ministers insist the plans would not hit the water group's "not-for-profit" status.

Glas Cymru told the BBC Wales Dragon's Eye programme that including them in plans for competition in the industry would mean "considerable danger to the water industry in Wales as currently owned".

It also claimed that rather than cutting bills, the change "will come at a significant cost to our customers".

There is also a prediction from Glas Cymru that in the event of competition, control of the Welsh water industry will "reside outside of Wales".

Unique business

The issue of introducing competition to the water industry is being mooted following a review on behalf of the assembly government and the UK's department for environment, food and rural affairs.

What we have built up through Glas Cymru is someone who actually cares about producing a quality product through quality infrastructure to people in Wales Mick Bates AM

The report carried out by Professor Martin Cave found that competition in Wales would be beneficial to Welsh business customers, and would not necessarily have a negative impact on the Glas Cymru business model.

It is a business model that has been hailed by some as a Welsh success story.

The company has no share holders and all its profits are reinvested in the business.

It also returns well over £20m a year to customers in the form of a special dividend.

The company is now preparing to celebrate its tenth anniversary, after taking over the running of Welsh Water in 2000, following a period of instability for the water supplier.

In a joint statement to Dragon's Eye, assembly government environment minister, Jane Davidson, and the UK minister for marine and the natural environment, Huw Irranca-Davies, said: "We are working closely on the Flood and Water Bill and are engaged in ongoing discussions looking in detail at the implications of the Cave Review's recommendations.

'Long-term investment'

"We will be issuing a joint consultation document on the way forward before the summer recess.

"We recognise the unique features of the Glas Cymru model in Wales, and its contribution to the diversity of water companies in England and Wales.

"None of the recommendations in the Cave Review should threaten the "not for profit" model."

However, the chairman of the assembly's sustainability committee, Mick Bates, called on Ms Davidson to ensure that Glas Cymru was exempted from competition.

He said: "What we have built up through Glas Cymru is someone who actually cares about producing a quality product through quality infrastructure to people in Wales.

"All that is at risk if this is implemented - and the minister has got to decide between these two things - short term profit for companies, or long term investment for the people of Wales."