Dyr Cymru Welsh Water

Parent company:         Glas Cymru

Regulated utility:         Dwr Cymru Welsh Water Ltd

Ownership:                   Not for profit organisation

Welsh Water's parent company Glas Cymru is an unusual water company in that it is the only not for profit organisation in the water industry. This means it has no shareholders and profits are either reinvested in the business or returned to customers.

In an imaginative move Glas Cymru was formed in 2000 to buy Welsh Water from the struggling Western Power Distribution business. Alongside this a debt financing package was established and the business refocused entirely on water and waste water treatment.

Until very recently the majority of operations have been contracted out. Welsh Water has just undertaken the biggest re-structuring since it was bought by Glas Cymru ten years ago. The operating contracts with United Utilities and Kelda have been terminated and all staff are being transferred back in-house. As a consequence its number of employees has jumped from only 170 to about 1800.

Welsh Water is unique among the water companies in having copious supplies of raw water due to its geography and high rainfall in Wales. Hence water leakage is of low concern but waste water treatment and in particular coastal discharges are an important issue. Despite taking an industry lead with its Green Seas initiative, where the company strives to work in partnership with other interested groups to achieve environmental improvement performance, its pollution record is poor. It has now announced a further £10m is to be invested in this area. Welsh Water has successfully reduced customer's water bills with its unique annual customer dividend.

Welsh Water faces some tough challenges as it seeks to reduce its operating costs by 20% while delivering £1.3 bn of capital investment over the next five years and further improve its operational performance.