Smoothing investment cycles in the water sector

This Treasury paper outlines the six key recommendations from research into mitigating cyclicality in the water sector.

IUK report on Smoothing investment cycles in the water sector
IUK report on Smoothing investment cycles in the water sector

Who wrote this?

Infrastructure UK (part of HM Treasury) and Ofwat.


Detailed study interviews took place with Anglian Water, Southern Water and United Utilities.


It was first published in July 2012.


To identify best practice and make recommendations to smooth out investment cycles, with the aims of reducing costs to consumers and promoting growth and sustainability.

Who should read this?

Anyone involved in investment and planning for water companies, and the government oversight of the water sector.


This paper gives six key recommendations:

  • Water companies and Ofwat should challenge cyclical investment through the price review process
  • Water companies should recognise the programme certainty provided at draft determination
  • Water companies should have feasibility and design studies prepared and planned, preferably a year early of programme delivery
  • Ofwat should balance risk between customer and company
  • Water companies should make effective planning (12-18 months ahead) part of the delivery process
  • Water companies and supply chain bodies should agree how to share provide standard pipeline information and sector skills and capability statements

This report identifies clearly that the degree of variability in the cycle is a key proxy for the effectiveness of the companies‟ planning processes and levels of outperformance.

This is part of the Infrastructure Cost Review publications available on the website

For more information and questions, please contact

Visit content host site