LETTERS Sewage supremos
Sir: The 'great quantity of ignorance' about executive pay, against which you fulminate in your leading article of 15 July ('Green- bury rules') seems to be shared in full mea- sure by The Spectator.
Your charge that 'water company bosses' have attended `to the details of their own lavish option deals before they have done anything to prove their contribution to shareholders and customers' is ludicrous, as is the charge that pay has risen 'relentlessly when company performance has gone down'.
In the first five years after privatisation, dr ten water and sewerage companies of England and Wales invested £13 billion in water quality and environmental protec- tion. This compared with £5 billion in the previous five years. Yet water prices increased by only about one third in real terms. Despite plans for a further £22 bil- lion of investment in the next ten years, price increases will, in real terms, be no more than half what they were before pri- vatisation. This is because these companies are now far more efficient, driven by the incentives of the regulatory system.
And has the investment produced results? The regulators obviously think so. Only last week the Chief Drinking Water Inspector reported that over 99 per cent of more than three and a half million samples tested last year met all health and aesthetic requirements.
The National Rivers Authority has been able to report that more than 80 per cent of designated bathing waters now comply with standards set, compared with 66 per cent a few years ago, with many more coastal sewerage schemes due for comple- tion this year. That river quality has improved. That more sewage treatment works than ever are meeting the quality standards set for them.
As regards shareholders, I have yet to come across any financial commentator that does not think water shares have proved a splendid investment. The Spectator seems curiously isolated from City opinion.
Director, The Water Services Association of England and Wales, 1 Queen Anne's Gate, London SW1