Welsh Water

Dŵr Cymru Welsh Water is a not-for-profit company which supplies drinking water and wastewater services to most of Wales and parts of western England that border Wales. In total, it serves around 1.4 million households and businesses and around three million people - and supplies nearly 830 million litres of drinking water per day.[4]

Dŵr Cymru Welsh Water
TypeLimited Company
IndustryPublic Utility
Founded1989
HeadquartersSt Mellons, Cardiff, (from 1 April 2021)
Key people
Peter Perry, Chief Executive[1]
ProductsWater and Wastewater Services
Revenue£779 million[2]
Number of employees
3,514[3]
ParentGlas Cymru Ltd.
Websitewww.dwrcymru.com

It is regulated under the Water Industry Act 1991 as amended by the Water Act 2014.[5]

History

Welsh Water originated from the privatisation in 1989 of water supply and waste water arms of the Welsh Water Authority which itself had its origins in the Welsh National Water Development Authority that was created by the 1973 restructuring of the water industry in England and Wales.

Welsh Water Authority was privatised by stock market flotation in 1989, along with the other nine regional water authorities, which provided the company with a substantial cash surplus for some years, which it used to diversify in a wide range of sectors including leisure (Hotels, Fishing etc.). It renamed itself Hyder in 1996 after taking over a local electricity company (SWALEC) and becoming a water and electricity multi-utility.

However, in 1999/2000, following the Windfall Tax on utility profits and the 1999 Ofwat price review, Hyder got into financial difficulties which led to its breakup following a takeover battle. Western Power Distribution purchased Hyder on 15 September 2000 with a view to acquiring its electricity distribution business, and rapidly sold off Hyder's other assets. Dŵr Cymru Welsh Water was sold, along with £1.85 billion of Hyder debt,[6] for £1 by WPD to Glas Cymru, a company set up by Nigel Annett and Chris Jones with the support of the company's first chairman Lord Burns to run the company for public benefit.[7] Under the terms of its licence, Glas Cymru, a company limited by guarantee, may not operate in sectors other than water.

Business

Measured by turnover, Welsh Water is the fifth-largest company based in Wales[8] and employs more than 3,500 people.

Its asset base is valued at more than £26 billion - and includes:

  • Maintaining over 26,500 km of water mains
  • Over 36,000 km of sewers
  • Managing over 830 wastewater treatment works
  • Analysing more than 600,000 tests a year sampling drinking water
  • Looking after 92 reservoirs

Coverage

In general, it provides services and operates across Wales from the catchments of the River Dee, River Clwyd in the north, round to the River Usk and River Wye in the south, and everything to the west of these catchments. This means that it includes part of the Wirral and Cheshire, and also parts of Gloucestershire, and Herefordshire, particularly Hereford. It excludes the area of Wales drained by the River Severn, which is instead served by Severn Trent. It also excludes those areas that were supplied by private water utilities such as Dee Valley Water which operated in the River Dee catchment supplying the Chester and Wrexham areas with water but is now a subsidiary of Severn Trent.

Not-for-profit status

In 2001, Welsh Water became a not-for-profit organisation with no shareholders. This differentiates it from all the other Water companies operating in England and restores it to the same organisational status as water supply utilities in Scotland and the pre-privatisation water supply undertakings in England.[9]

Under Glas Cymru’s ownership, the company's assets and capital investment are financed by bonds and retained financial surpluses. The Glas Cymru business model aims to reduce Welsh Water’s asset financing cost, the water industry’s single biggest cost. Financing efficiency savings to date have largely been used to build up reserves to insulate Welsh Water and its customers from any unexpected costs and also to improve credit quality. As of 2019, the company has the strongest credit ratings among the England and Wales-based water and sewerage companies Water industry.[10]

When it was established as a not-for-profit company, Welsh Water had a gearing level (the ratio of net debt to Regulatory Capital Value) of around 93%. Since 2001, the company has reduced this level to around 60% in 2019-2020.[11]

Not-for-profit 'dividends'

Part of Welsh Water's not-for-profit model means any surplus money is reinvested back into the business or into customer services, or to reduce customer bills. To date, around £450 million has been reinvested in such ways.[12]

Visitor attractions and reservoirs

Welsh Water owns more than 90 dams and reservoirs across its areas of operation - including a number of flagship visitor attractions. These generally provide access to the reservoir and surrounding land, but also provide visitor centres, leisure facilities, walking routes, and cafes. Their main visitor attraction sites are:

In January 2016, following the scrapping of Western Power Distribution plans to redevelop Llanishen Reservoir for housing, Welsh Water acquired both Llanishen and Lisvane Reservoirs from steel company CELSA Group on a 999-year lease, which allows the company to use them for water supply and recreational purposes while also allowing CELSA to continue to take its water supply from the Lisvane Reservoir.

It has also submitted plans for the re-development of Llanishen reservoir, and its adjacent Lisvane reservoir, in the north of Cardiff in November 2020. If accepted, the redevelopment would include the construction of a visitor centre, watersports centre, biodiversity facilities, and education hub.[13]

References
  1. https://corporate.dwrcymru.com/en/about-us/governance/our-directors/peter-perry
  2. https://corporate.dwrcymru.com/en/library/group-annual-report-and-accounts/glas-cymru-cyfyngedig
  3. https://corporate.dwrcymru.com/en/library/group-annual-report-and-accounts/glas-cymru-cyfyngedig
  4. https://corporate.dwrcymru.com/en/about-us
  5. http://www.legislation.gov.uk/ukpga/2014/21/contents
  6. http://www.dwrcymru.com/Glascymrusite/English/archive/pressreleases/_pdf/TopDealAwards_PR.pdf
  7. https://www.walesonline.co.uk/business/business-news/welsh-water-boss-nigel-annett-2013111
  8. https://www.business-live.co.uk/economic-development/biggest-firms-waless-19439338
  9. Water, Dwr Cymru Welsh. "What does not-for-profit mean? | Company Information | Dwr Cymru Welsh Water". www.dwrcymru.com. Retrieved 2017-11-28.
  10. https://corporate.dwrcymru.com/-/media/Project/Files/Page-Documents/Corporate/Library/PR19-Reports/Resilience/Financial-Resilience-WSH.ashx
  11. https://corporate.dwrcymru.com/en/library/group-annual-report-and-accounts/glas-cymru-cyfyngedig
  12. https://corporate.dwrcymru.com/en/news-media/2019/glas-cymru-co--founder-chris-jones-to-retire-as-ceo-and-pete-perry-announced-as-successor
  13. https://www.walesonline.co.uk/news/wales-news/llanishen-lisvane-reservoir-welsh-water-19234890
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