NI Water lags on wastewater performance

(by Verity Mitchell)

The Utility Regulator has published its cost and performance review for Northern Ireland Water (NI Water) for 2022-2024. This compares the company’s performance with that agreed for the current regulatory period, PC21 (2021-2027). This does not reflect the mid-term review undertaken by the regulator, which will define the updated standards required for the final years of PC21, which has now been extended until 2028.

NI Water broadly met regulatory expectations for performance in consumer and water service provision, but underperformed in wastewater up to the end of the 2023-2024 reporting year. The quality of outputs from wastewater treatment plants and level of intermittent discharges were unsatisfactory, the regulator concluded. NI Water blamed this on constraints to allowed capital expenditure which it said made its position untenable.

The company underspent capex by £52m relative to its regulatory allowances in the two-year period of £690m. The regulator criticised the company for submitting plans that were insufficiently well defined to allow spend, and expects NI Water to address the issue of proper planning so the underinvestment does not reoccur. NI Water has continued to close the opex efficiency gap relative to water companies in England and Wales.

A dividend of £35.2m was paid to its government shareholder over the two-year period in line with the company’s expectations, but this represented a reduction from the 2021-2022 one-year dividend of £27.5m. The company’s growing regulatory capital value reached £3,737bn at the end of 2024.

The company met or exceeded 34 of the 43 key output measures set at PC21. The lagging outputs were mostly in wastewater.

There is continuing debate between the utility, its regulators and its government shareholder (the Department for Infrastructure) over whether the current level of investment is adequate for NI Water to fulfil its statutory duties. Ongoing operational underperformance, according to the NI Water board, is because there has not been a scaling up of investment allowed in Northern Irish water infrastructure compared to that agreed by the Government for England and Wales.