Ofwat has amended South East Water’s Conditions of Appointment to allow it to replace Mid Kent Water as the water service provider for nearly 250,000 customers in the Kent area.
This will give effect to the merger of South East Water and Mid Kent Water, which was cleared by the Competition Commission in May, and ensure that customers’ interests continue to be protected.
Ofwat has also terminated Mid Kent Water’s appointment as a water service provider.
These changes follow Ofwat’s statutory consultation last month which proposed that South East Water should replace Mid Kent Water and set out the regulator’s reasons for doing so.
The Competition Commission concluded that the merger should proceed on certain conditions. The first is that the merged company should reduce its customers’ bills by £4 million for 2008-09 – the equivalent of nearly £5 on average for each customer.
The second is that customers should benefit from the extra efficiencies arising from the merger. Price limits at the next price review in 2009 will reflect the benefit of a £3.1 million reduction in the expanded South East Water’s operating costs.
Ofwat will ensure these conditions are implemented and that South East Water maintains, and where necessary improves, its service standards to all its customers.