7 June 2007
Households and businesses in Scotland could see their water bills surge unless Scottish Water is bailed out by the Executive, according to reports.
The Water Industry Commission (WIC) has called on the Executive to guarantee 200 million a year to the publicly-owned Scottish Water, in order to allow it to keep costs low.
If the funding is not made available, the utilities firm may be forced to raise prices for customers or initiate more private finance initiative (PFI) projects for infrastructure.
In the WIC's annual report, Sir Ian Byatt, chairman of the commission, explained that Scottish Water either needs to be made into a mutual or co-operative entity, which would allow it to borrow money from the finance markets, or that the Executive should commit to bailing it out annually.
The Scotsman quoted Sir Ian as saying: "I haven't discussed this with John Swinney [the finance secretary], but an implication is that the money will be available and if the money is available through the public sector, that's absolutely fine."
However, he added that without a guarantee of the 200 million, there is always the risk that the added cost could be passed on to consumers.
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