Matt Cuchra, Partner at KPMG’s Infrastructure Advisory Group comments on the PR14 Methodology Consultation published by Ofwat this week:
“This is a very important document for water companies and all stakeholders in the sector as it sets out details of how Ofwat proposes to implement the Future Price Limits (FPL) and wider sector reforms and reflect them in regulation. It outlines how prices and cash flows in the industry will be set and how companies’ performance will be assessed over the next five years price control period and beyond. Companies have two months to respond to the consultation.
“In terms of timing it will be a big challenge for them to prepare business plans under the new methodology. The new methodology presents significant opportunities for companies to determine what they want and what they should be aiming for, for players in the sector there will be more freedom than ever before but also new risks.
”If the UK water sector is to continue to attract the capital it needs for future infrastructure investment it is very important that the water companies show very clearly in their business plans how they will respond to the new challenges and the new risks of the PR14 regime.”
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KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 12,000 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2012. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 156 countries and have 152,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
