Water Companies Team Up to tap £4bn Business Supply Market

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Water Companies Team Up to tap £4bn Business Supply Market

Two of Britain's biggest water companies are poised to announce a major new tie-up to tap the £4bn business supply market before it opens up to competition next year.

Yorkshire Water and Kelda Water Services are set to tell the industry on Tuesday that they will team up to compete for lucrative business supply contracts from April next year when companies in England will be able to choose their supplier for the first time.

860a8d1aa57a47c0b3f8e9004f3a6c2d.pngKelda Water Services manages non-regulated water and waste services including work in the Scottish water market, which was liberalised a decade ago. Yorkshire Water supplies 1.24bn litres of drinking water a day.

Both companies are owned by former FTSE 100 utility Kelda Group, which was taken private in 2008.

These plans comes just weeks before the regulator’s deadline for new suppliers to come forward and follows a wave of mergers and exits in the water industry in 2016.

The tie-up will compete with new water supply giants including the WaterPlus company set up by Severn Trent and United Utilities earlier this year.

Sources close to WaterPlus say the company has already snapped up a seven-figure contract to supply the David Lloyd leisure centre group across its 84 sites, which is the largest UK wide switch away from a regional water supplier to date.

Prior to the switch, David Lloyd would have dealt with 15 different water suppliers for billing and specific site issues.

Ofwat believes that by allowing English companies to consolidate their business supply with one business supplier, regardless of region, the industry will become more competitive and companies will get a better deal.

As well as going through a wave of mergers, the industry has also seen the exit of Thames Water from the business supply market, saying it will transfer all of its current business customers in London and the South East to Scottish retailer Castle Water.

Thames Water will continue to provide water to its household customers, which make up more than 95 per cent of its customer base. 

Last week the start-up water supplier Alternative Water Company said it plans to enter the business supply market with a fresh model. The company said it will design, build, maintain the boreholes which exist on the sites of large companies in order to tap their own supplies.

By doing this it will be able to undercut incumbent water suppliers by as much as 25pc, the company said.

Source: Telegraph

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