Article Abstract:
Price controls have been announced for United Kingdom water companies which are less stringent than expected. A price cut of between 15% and 20% was suggested in Oct 1998, but the cut actually averaged 13.7%. Companies can ask for the Competition Commission to examine the issue, though they could have larger cuts imposed. Companies are also referred to the commission if they carry out mergers, so have an incentive to carry on with planned mergers rather than complain about price cuts.
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Article Abstract:
Ian Byattis scheduled to end a seven-year period as regulator for the UK water industry in Jul 1996, but he may continue in this post. Analysts argue that the industry will benefit if he stays since there will be less uncertainty. There is a division of opinion as to whether the UK Labor Party is more likely to control the companies' profits if he stays, and some argue that he has given the Labor Party weapons to attack the industry by criticizing it himself.
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Article Abstract:
Ian Lang, the UK Trade secretary, has blocked two bids for South West Water from Severn Trent and Wessex. Lang's move means that further mergers between water utilities are unlikely. He argued that the industry regulator would be less able to obtain information if the merger took place. Wessex may carry out a share buyback and seek acquisitions in waste management. Severn Trent may also carry out a share buyback and could bid for East Midlands Electricity.
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