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Capital expenditure split between water and wastewater

Over the next five years (2005-10) capital investment on water will be £8 billion and on sewerage £8.8 billion. This continues the trend from AMP 3 when 55% of capital investment was on the sewerage service.

This is a complete reversal of the situation in the years 1990 - 95 when water was the dominant area for investment. Now sewage treatment is the largest area. This reflects the massive investment in coastal sewage treatment works to meet the requirements of the Urban Waste Water Directive. A good example would be the £30m new sewage treatment works that has been commissioned for Weston-super-Mare. Even though most of the obligations under the UWWD have been met this situation is continuing primarily due to the need to increase capital maintenance expenditure to ensure asset servicability is maintained.

Gross capital investment by service area


Water                                         Sewage

Source: OFWAT report on financial performance of the water companies

Water distribution continues to be a major area of investment. This is not new pipwork to meet increased demand - demand for water is static - rather it is expenditure to reduce contamination problems from old pipework and of course to reduce leakage.

Historic split in capital spend

Source: OFWAT report on financial performance of the water companies

 

 
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