top of page

Ofwat consults on cost adjustment uplift for Havant Thicket total expenditure

by Karma Loveday

Ofwat has applied an 8-10% efficiency challenge to a cost adjustment claim brought forward by Portsmouth Water for the totex allowed at PR19 for the construction of the Havant Thicket reservoir.


At PR19, the watchdog set a ten-year price control for Havant Thicket, with an allowance of £123.6m in 2017/18 prices. But due to the early stage and considerable uncertainty, it put a cost adjustment mechanism in place to enable Portsmouth to apply for an amendment should this be needed.The water company put in an application in October – following planning permission and contract procurement – for £338.6m, a £215m increase.


Ofwat’s analysis resulted in a view of costs of between £306m and £310.9m in 2017/18 prices (£334.7m-£340.1m in November 2021 prices). It said Portsmouth had accepted its view of costs with the exception of £5.4m associated with the existing enabling works contract and future compensation events.


Ofwat invited Portsmouth Water to provide further evidence to substantiate its concerns, and will consult on the draft cost allowance until 6 January.

Comments


bottom of page