How many other water retail companies are on a financial cliff edge as Aquaflow Utilities Ltd gets into deep water.
Since water market deregulation more and more individuals have set up water retail businesses with very little real knowledge or expertise of the water market.
Predictions over the liquidity of many water retail companies have been banded around the water industry for months now and the cracks are certainly appearing.
With one water retail company now likely to enter into liquidation by 9th April 2019 according to the latest announcement by the regulator OFWAT
The regulator has announced that they will step in using powers under an interim supply code, ensuring that the customers of Aquaflow Utilities Ltd will be appointed a new water retail company as soon as possible.
Graham Mann water industry expert at water consultants H20 Building Services says
“It was only a matter of time before the first water retail company went bust.
Not only do you need substantial funds behind a new water retail business but also you must have vast knowledge and expertise of the water industry and these are key tributes for any water retail market start ups.
Ultra low margins do not help any new business, that coupled with water market billing data that is incorrect and the cost to the water retailer of fixing these issues then the reality is that many more water retailers will and are feeling the pain.
This first of many will not instill confidence in a water retail market that in some areas is in crisis and the water regulator OFWAT really needs to get a grip and resolve legacy billing issues. Issues which transfer into huge costs to the water retailers to resolve and frustrates customers causing loss of confidence in the water market.
I certainly agree with OFWAT’s Senior Director of Customer and Casework Emma Kelso who said “Of course it is always difficult to see a company fail but this is the market in action, not all retailers will thrive and it is possible that in the future others will leave the market too. As the market structure evolves we will continue to make sure that customers are protected and continue to benefit from competition”
Having looked at all the water retailers I would expect at least 5 will get into deep water now and by the end of the year they will fail”
It is for this very reason all of our clients where we switch water supplier for them we automatically give them the added value service of water bill validation so in the event of a water retail company failure we ensure a smooth transition to another water retailer and will work in partnership with the water regulator OFWAT to ensure minimum disruption.
No customers should switch water suppler without continued support from a water industry expert.
WATER SERVICES REGULATION AUTHORITY NOTICE OF REVOCATION OF THE WATER SUPPLY AND SEWERAGE LICENCES OF AQUAFLOW UTILITIES LIMITED