TABLE OF CONTENTS

1. EXECUTIVE SUMMARY 1

2. INTRODUCTION 4
2.1 Definitions 5
2.2 Methodology 6
2.3 Abbreviations 6
2.4 Market Positioning 7
2.5 UK Economy 8
2.6 Market Factors 11

3. INDUSTRY STRUCTURE 14
3.1 Chapter Summary 15
3.2 England & Wales 15
3.2.1 Sewage Treatment Processes 19
3.2.2 Legislation 20
3.2.2.1 The Urban Waste Water Treatment (England and Wales) Regulations 1994 20
3.2.2.2 The Drinking Water Directive 98/83/EC 21
3.2.2.3 The EC Bathing Water Directive 76/160/EEC 21
3.2.2.4 The EC Shellfish Waters Directive 79/923/EEC 23
3.2.3 Regulators 24
3.2.4 Performance 24
3.3 Scotland 28
3.4 Northern Ireland 28

4. CAPITAL EXPENDITURE 32
4.1 Chapter Summary 33
4.2 Capital Expenditure, 2004/05-2008/09 34
4.3 Process Plant Expenditure, 2004/05-2008/09 42
4.4 Civil Engineering Expenditure, 2004/05-2008/09 42
4.5 Building Expenditure, 2004/05-2008/09 45
4.6 Other Expenditure, 2004/05-2008/09 45
4.7 Sewerage 46
4.7.1 Sewage Treatment 47
4.7.2 Other Expenditure 49

5. COMPANY ANALYSIS 51
5.1 Chapter Summary 52
5.2 England and Wales 52
5.2.1 Anglian Water Services 53
5.2.2 United Utilities Water 56
5.2.3 Northumbrian Water 59
5.2.4 Severn Trent Water 61
5.2.5 South West Water 64
5.2.6 Southern Water Services 67
5.2.7 Thames Water Utilities 70
5.2.8 Dŵr Cymru Cyfyngedig 73
5.2.9 Wessex Water 76
5.2.10 Yorkshire Water Services 79
5.3 Scottish Water 82
5.4 Northern Ireland 83

6. MARKET FORECAST 84
6.1 Chapter Summary 85
6.2 Future Expenditure 86
6.3 Forecast Capital Expenditure, 2009/10-2013/14 92
6.4 Forecast Process Plant Expenditure, 2009/10-2013/14 96
6.5 Forecast Civil Engineering Expenditure, 2009/10-2013/14 97
6.6 Forecast Building Expenditure, 2009/10-2013/14 99
6.7 Forecast Other Expenditure, 2008/09-2013/14 99

7. FURTHER SOURCES & CONTACTS 100
7.1 Trade Associations & Regulatory Bodies 101
7.2 Trade Magazines 102
7.3 Trade Exhibitions 105

LIST OF TABLES

1: Details of the Water and Sewerage Companies, as at February 2010 16
2: Turnover from Water Services in England and Wales, by Type, 2004/05-2008/09 17
3: Water Customers of the Water and Sewerage Companies, Household and
Non-Household, 2009/10 18
4: Sewerage Customers of the Water and Sewerage Companies, Household and Non-Household, 2009/10 19
5: England and UK Bathing Water Compliance, 2005-2009 23
6: Pollution Category 1 and 2 Incidents ln England and Wales, by Industry, 2008 25
7: Water Pollution Incidents in England and Wales, 2004-2008 25
8: Water Pollution Incidents in the Sewage & Water Industry in England and Wales,
2004-2008 26
9: Connected Properties Flooded in England and Wales, by Company, 2006/07-2008/09 26
10: Properties affected by Internal and External Flooding from Sewers, by Water and
Sewerage Company, 2005-2010 27
11: Total Capital Expenditure by Water and Sewerage Companies in England & Wales,
2005- 2010 34
12: Total Capital Expenditure by Water Only Companies in England & Wales, 2005- 2010 35
13: UK Capital Expenditure on Water and Sewerage Services, 2004/05-2008/09 36
14: UK Capital Expenditure on Water and Sewerage Services, by Type, 2004/05-2008/09 36
15: Analysis of Sewerage Related Capital Expenditure in England and Wales, by
Company, 2004/05-2008/09 37
16: Analysis of Sewerage Capital Expenditure in England and Wales, by Water Service Company, by Type, 2008/09 38
17: Analysis of Sewerage Capital Expenditure in England and Wales, by Company and Purpose, 2008/09 39
18: Analysis of Scottish Water Capital Expenditure on Water and Sewerage Services,
2004/05-2008/09 41
19: Sewerage Related Capital Expenditure in Northern Ireland, by Type, 2002/03-2006/07 41
20: UK Capital and Process Plant Expenditure by the Water and Sewerage Industry,
2004/05-2008/09 42
21: Civil Engineering Construction Output by the Sewerage Industry in Great Britain,
2005-2009 43
22: Public and Private Civil Engineering Construction Output by the Sewerage Industry,
2005-2009 44
23: UK Capital and Civil Engineering Expenditure by the Water and Sewerage Industry, 2004/05-2008/09 44
24: UK Capital and Building Expenditure by the Water and Sewerage Industry,
2004/05-2008/09 45
25: UK Capital and Other Expenditure by the Water and Sewerage Industry,
2004/05-2008 45
26: Sewers Renovated and Replaced in England and Wales, by Company,
2004/05-2008/09 46
27: Analysis of Sewerage Capital Expenditure in England and Wales, 2004/05-2008/09 47
28: Analysis of Sewerage Capital Expenditure in England and Wales, by Company,
2004/05-2008/09 47
29: Analysis of Sewage Treatment Capital Expenditure in England and Wales,
2004/05-2008/09 48
30: Analysis of Sewage Treatment Capital Expenditure in England and Wales, by
Company, 2004/05-2008/09 48
31: Analysis of General Sewerage Treatment Capital Expenditure in England and
Wales, 2004/05-2008/09 49
32: Analysis of General Sewerage Capital Expenditure in England and Wales, by
Company, 2004/05-2008/09 49
33: Financial Analysis of Anglian Water Services, 2005-2009 53
34: Key Financial Ratios for Anglian Water Services, 2005-2009 54
35: Anglian Water, Infrastructure Details, 2004/05-2008/09 54
36: Total Capital Expenditure of Anglian Water Services, 2004/05-2008/09 55
37: Analysis of Sewerage Capital Expenditure by Anglian Water Services, by Type,
2004/05-2008/09 55
38: Financial Analysis of United Utilities Water, 2005-2009 56
39: Key Financial Ratios for United Utilities Water, 2005-2009 57
40: United Utilities, Infrastructure Details, 2004/05-2008/09 57
41: Total Capital Expenditure of United Utilities, 2004/05-2008/09 58
42: Analysis of Sewerage Capital Expenditure by United Utilities Services, by Type,
2004/05-2008/09 58
43: Financial Analysis of Northumbrian Water, 2005-2009 59
44: Key Financial Ratios for Northumbrian Water, 2005-2009 59
45: Northumbrian Water, Infrastructure Details, 2004/05-2008/09 60
46: Total Capital Expenditure of Northumbrian Water, 2004/05-2008/09 60
47: Analysis of Sewerage Capital Expenditure by Northumbrian Water, by Type,
2004/05-2008/09 61
48: Financial Analysis of Severn Trent Water, 2005-2009 62
49: Key Financial Ratios for Severn Trent Water, 2005-2009 62
50: Severn Trent Water, Infrastructure Details, 2004/05-2008/09 63
51: Total Capital Expenditure of Severn Trent Water, 2004/05-2008/09 63
52: Analysis of Sewerage Capital Expenditure by Severn Trent Water, by Type,
2004/05-2008/09 64
53: Financial Analysis of South West Water, 2005-2009 65
54: Key Financial Ratios for South West Water, 2005-2009 65
55: South West Water, Infrastructure Details, 2004/05-2008/09 66
56: Total Capital Expenditure of South West Water, 2004/05-2008/09 66
57: Analysis of Sewerage Capital Expenditure by South West Water, by Type,
2004/05-2008/09 67
58: Financial Analysis of Southern Water Services, 2005-2009 68
59: Key Financial Ratios for Southern Water Services, 2005-2009 68
60: Southern Water, Infrastructure Details, 2004/05-2008/09 69
61: Total Capital Expenditure of Southern Water Services, 2004/05-2008/09 69
62: Analysis of Sewerage Capital Expenditure by Southern Water Services, by Type,
2004/05-2008/09 70
63: Financial Analysis of Thames Water Utilities, 2004-2009 71
64: Key Financial Ratios for Thames Water Utilities, 2004-2009 71
65: Thames Water Utilities, Infrastructure Details, 2004/05-2008/09 72
66: Total Capital Expenditure of Thames Water Utilities, 2004/05-2008/09 72
67: Analysis of Sewerage Capital Expenditure by Thames Water Utilities, by Type,
2004/05-2008/09 73
68: Financial Analysis of Dŵr Cymru Cyfyngedig, 2005-2009 74
69: Key Financial Ratios for Dŵr Cymru Cyfyngedig, 2005-2009 74
70: Dŵr Cymru Cyfyngedig, Infrastructure Details, 2004/05-2008/09 75
71: Total Capital Expenditure of Dŵr Cymru Cyfyngedig, 2004/05-2008/09 75
72: Analysis of Sewerage Capital Expenditure by Dŵr Cymru Cyfyngedig, by Type,
2004/05-2008/09 76
73: Financial Analysis of Wessex Water, 2005-2009 77
74: Key Financial Ratios for Wessex Water, 2005-2009 77
75: Wessex Water, Infrastructure Details, 2004/05-2008/09 78
76: Total Capital Expenditure of Wessex Water, 2004/05-2008/09 78
77: Analysis of Sewerage Capital Expenditure by Wessex Water, by Type,
2004/05-2008/09 79
78: Financial Analysis of Yorkshire Water Services, 2005-2009 80
79: Key Financial Ratios for Yorkshire Water Services, 2005-2009 80
80: Yorkshire Water, Infrastructure Details, 2004/05-2008/09 81
81: Total Capital Expenditure of Yorkshire Water Services, 2004/05-2008/09 81
82: Analysis of Sewerage Capital Expenditure by Yorkshire Water Services, by Type,
2004/05-2008/09 82
83: Annual Price Limits for 2005/2006 to 2009/2010, by Water and Sewerage
Companies 86
84: Annual Price Limits for 2005/2006 to 2009/2010, by Water Only Companies 87
85: Annual Price Limits for 2010/2011 to 2014/2015, by Water and Sewerage
Companies 87
86: Annual Price Limits for 2010/2011 to 2014/2015, by Water Only Companies 88
87: Average Expected Household Bill, by Water and Sewerage Companies, 2004/2005
and 2009/2010 89
88: Average Expected Household Water Bill, by Water Only Companies, 2009/2010
and 2014/2015 90
89: UK Population, by Region, 2010-2025 91
90: Deadline for Implementation of Aspects of the Water Framework Directive 92
91: Total Proposed Capital Expenditure by Water and Sewerage Companies in England
& Wales, 2010- 2015 93
92: Forecast UK Capital Expenditure on the Water and Sewerage Industry,
2009/10-2013/14 94
93: Estimated Number of Connected (billed) Dwellings in Scotland, 2006-2010 94
94: Forecast Capital Expenditure for Scottish Water, 2009/2010-2013/2014 95
95: Forecast Investment Programme for Northern Ireland Water, 2008/2009-2012/2013 96
96: Forecast UK Capital and Process Plant Expenditure by the Water and Sewerage
Industry, 2009/10-2013/14 96
97: UK Capital and Civil Engineering Expenditure by the Water and Sewerage Industry, 2009/10-2013/14 98
98: Forecast UK Capital and Building Expenditure by the Water and Sewerage Industry, 2009/10-2013/14 99
99: Forecast UK Capital and Other Expenditure by the Water Industry, 2009/10-2013/14
99