LONDON (Reuters) -Britain's water regulator Ofwat proposed lower bill hikes and less investment than water companies had asked for, laying out a plan which it said would help improve Britain's sewage pollution crisis while maintaining a fair price for consumers.
The new Labour government also set out steps to tighten regulation around the water industry, which has come under intense political scrunity due to a funding crisis at the country's biggest supplier Thames Water, and industry-wide sewage spills.
For the next five years, Ofwat said on Thursday that companies would be able to increase average bills by 21%, or 94 pounds, and that overall the companies should spend 88 billion pounds on upgrading infrastructure to clean up rivers.
But those bill rises were much lower than companies had wanted.
Thames Water, for example, had wanted to hike bills by 191 pounds over the five-year period, but making its initial decision Ofwat said it would allow a rise of 99 pounds.
The privately-owned company had warned it would run out of money next year if it did not secure 3.25 billion pounds of equity and that it needed the higher bill rise to help it raise new equity from investors.
(Reporting by Sarah Young, Editing by Paul Sandle)
