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Case Study

Kelda, Dwr Cymru: Towards a corporate retreat from water privatization in England and Wales?

By Ralf Boscheck

6 pages

December 2005

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Reference: IMD-3-0924

By November 2000, nearly all of the 10 water and sewage companies in England and Wales were considering options for separating the running from the owning of their infrastructures. Even though Kelda, owner of Yorkshire Water, had failed to receive permission to sell its water assets to a customer-owned mutual company, the Welsh group Glas Cymru continued its plans to turn Welsh Water into a not-for-profit company, guaranteed and owned by 200 members of the “great and the good” in Wales. Selling assets to companies entirely funded by debt promised lower costs of capital in meeting the stringent investment targets and tough price limits set by the previous regulator Sir Ian Byatt. But there was also concern for how this would affect the efficiency of operations and the viability and legitimacy of regulatory control. It was up to the new regulator, Philip Fletcher, to decide whether to authorize the new capital structures and thereby trigger the most drastic reorganization of the water industry since its privatization in 1989.

Learning Objective

Methods of regulatory economics and process

Keywords

Regulation, Financial Restructuring, Water

Type

Published Sources

Available Languages

English

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