Survey of Water Industry Cost of Capital and Risks Following Ofwat's ''Prospects for Prices''
1 January 1999
By Dr. William Baker and Dr. Richard Hern
In October 1998, Ofwat published "Prospects for Prices," a consultation paper on strategic issues affecting water companies' bills over the period 2000-2005. That paper sets out Ofwat's view on the cost of capital for the water industry over the period 2000-2005.
In response to Prospects for Prices, NERA conducted a survey of financial markets on key issues relevant to the UK water industry cost of capital over the period 2000-2005.
Detailed interviews were conducted with the following finance professionals:
:: six water utilities analysts;
:: two water bond analysts;
:: four water utilities banking institutions;
:: three credit rating agencies.
The main findings of the survey are detailed in this report.
