The overhaul of the UK water sector shows how quickly the assumptions underpinning a regulated market can shift. Rules are being rewritten, ownership structures are under pressure and decision-making authority is moving. For companies drawn by the scale of investment, the key question is not simply how large the pipeline is, but who will decide, who will pay and on what terms.

Two signals, less than two weeks apart

In mid-September, at an event hosted by the Spanish Chamber of Commerce in the United Kingdom, executives from Spanish-origin construction and engineering groups agreed that water had become the most promising segment of the British infrastructure market, ahead of roads, rail and hospitals. Alcibíades López, director for Europe at FCC Construcción, put it simply, as the Spanish business daily Expansión reported on 22 September: “the future is in water”.

On 29 September, Prime Minister Andy Burnham told the Labour Party conference that a strengthened Water Bill would remove existing restrictions on government ownership of water companies, give mayors new powers to hold them to account and begin “a 10-year journey to a very different water system”.

There is no contradiction between the two. The investment opportunity is real, but so is the political determination to alter the way the sector is governed and controlled. That is what makes the case relevant beyond water. Companies are being asked to commit capital and execute long-term projects while some of the basic conditions of the market are still being redefined.

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