(2) what estimate he has made of the cost of removing (a) pesticides and (b) nitrates from drinking water supplies in each year since 2000.
Ofwat is the economic regulator of the water and sewerage industry in England and Wales. Companies report to Ofwat each year in their June return on their expenditure in various categories.
Over the five years to 2005-06, companies reported additional capital expenditure of £49 million on reducing pesticides levels and £75 million on reducing nitrate levels in the public water supply (in 2005-06 prices inflated using the retail price index). This is shown for each year since 2000 in the following table.
Pesticides Nitrates 2001-02 8 6 2002-03 6 13 2003-04 3 17 2004-05 1 4 2005-06 31 35
This is the additional capital expenditure on new assets. As part of their base expenditure, companies also maintain the assets installed previously to reduce pesticides and nitrates levels, and also incur the costs of operating these water treatment plants. Ofwat does not collect this information separately.
Ofwat publishes a summary of its assumptions when setting price limits for each investment period. For 2000-05, the assumed need for capital investment to address exceptional problems of deteriorating raw water quality, the majority of which was for reducing pesticides and nitrate level, was £200 million (in 2005-06 prices, inflated using the construction outputs price index). There were changes agreed to this programme with the Drinking Water Inspectorate during the investment period to reflect changes in the risks of failure to meet drinking water standards.
For 2005-10, Ofwat assumed additional capital expenditure for reducing pesticides levels of £86 million and nitrate levels of £340 million (2005-06 prices, inflated using the construction outputs price index) along with associated operating costs of £8 million each year. These are the additional costs of new treatment or blending plant. The maintenance and operating costs of existing treatment plant are included in the base service provided by the water companies.