South West Water

Parent Company:         Pennon Plc

Regulated utility:         South West Water Ltd

Ownership:                   Public Limited Company

Although one of the smallest water companies by area and population, South West Water has the longest and perhaps most beautiful coastline at 625 miles long. At the time of privatisation it had almost no coastal sewage treatment. Now after its £1.5 bn Clean Sweep investment programme nearly all sewage from the major coastal towns is treated.

The focus has moved beyong Clean Sweep to securing water supplies in the face of climate change and population growth as well as refurbishment of the early Clean Sweep plants, water mains replacement, smaller sewage treatment works and combined sewage overflows. South West Water is pioneering catchment management as a means to avoid pollutants enetering its water supplies.

Through its vision of Pure Water, Pure Service and Pure Delivery capital investment of £545m is planned over the current regulatory period delivered through South West Water's new H5O capital delivery model. The delivery model is an alliance with contractors Balfour Beatty and Interserve and consultants Pell Frischmann and Hyder. There is an increased focus on capital maintenance (66% of total progtramme compared to 43% in K4) and achieving operational efficiencies.

The massive investment in sewage treatment has resulted in South West Water's customers having the highest bills in the UK despite the South West being relatively poor. This was addressed in the last budget, with an agreement to reduce customers bills in the South West by £50 a year.

South West Water is unusual in that the regulated water company makes up less than 50% of the group's turnover. Viridor its waste management and renewable energy business has become a leading player in the sector with turnover of £761m and operating profit of £64m. Viridor has achieved impressive PBITA compound growth of 22% since 2002 growing by a mixture of organic growth and acquisitions. It has increasing moved into waste recycling and renewable energy.