Open Water
4th Floor
21 Bloomsbury Street
London
WC1B 3HF
Web www.open-water.org.uk
Dear [Name]
Open Water Market Limited
We are pleased to be able to inform you that Open Water Market Limited (OWM Ltd) has now been fully set up. As you will be aware, the High Level Group agreed to set up OWM Ltd to provide a funding vehicle to help facilitate the new market arrangements that will be put in place in England following the
Government's Water Bill. Ofwat has published information notes IN 14/02 (Update on preparation for a new retail market for non-household customers 1 ) and IN 14/03 (Update on open water funding, resources and governance 2 ) which set out, amongst other things, the proposed funding arrangements for OWM Ltd.
Progress has been made in the establishment of OWM Ltd for Phase 1 in a number of areas. Board members have been identified and are being appointed, Articles of Association have been adopted and a number of applications for membership have been received and processed. Headline reports are being produced for each Board meeting and will be published on the Open Water website 3 as soon as they are available.
The purpose of this letter is to request a voluntary contribution from [insert company name]. This will help with the important prudent preparatory work ahead of the Water Bill receiving Royal Assent (expected to be no later than May 2014) and the work immediately following Royal Assent while Ofwat proposes the necessary changes to water undertakings licenses (expected to be no more than two months from Royal
Assent).
A number of water and sewerage undertakers have previously highlighted their intention to provide collective funding in the region of £1.6million for Phase 1. OWM Ltd has reviewed its requirements and considers that a budget of £800k is now sufficient to fund Phase 1 activities 4 .
1 http://www.ofwat.gov.uk/competition/review/prs_in1402nonhhmarket.pdf
2 http://www.ofwat.gov.uk/competition/review/prs_in1403openwater.pdf
3 http://www.open-water.org.uk/
4 Excluding activities associated with the procurement of the Market Operator systems (the strategy for which remains under review)
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We are therefore inviting donations in line with a budget of £800k for Phase 1. We propose that companies make these donations in four, monthly instalments (April to July inclusive) to the OWM Ltd bank account, the details of which are set out below:
The Royal Bank of Scotland Edinburgh
St Andrew Square
PO Box 51
36 St Andrew Square
Edinburgh
EH2 2AD
Account Number:
Sort Code:
16500464
83-06-08
The budget for Phase 1 will remain under review and should expenditure be less than forecast, we will write to you again forgoing all or part of the later instalments.
It is important to remind you that membership of OWM Ltd includes Industry Funding Members (open to undertakers holding appointments under the Water Industry Act 1991) and Industry Non Funding Members
(open to companies holding water or sewerage supply licences under the Water Industry Act 1991, to
Scottish Water and to companies holding licences granted under the Water Services etc. (Scotland) Act
2005). Membership is not conditional upon the provision of funding for Phase 1 and, as identified above, we have now received a number of applications.
Once Royal Assent is obtained for the Water Bill, it is proposed that the governance of OWM Ltd will transition to a partly elected Board for Phase 2. This Board will oversee the market set-up in advance of market opening in April 2017. However, only members from Phase 1 will be eligible to vote for Board members for Phase 2. Therefore, if you have not already done so, we would encourage you to take up membership as soon as possible to enable your participation in the election process. A template letter of application is enclosed with this letter along with a copy of the Articles of Association for information.
Ofwat has recently written to you concerning a new temporary licence condition, which would require all appointed companies and Water Supply Licensees in England and Wales to become members of OWM
Ltd and to fund OWM Ltd in Phase 2.
If you have any questions in relation to the matter addressed in this letter, or indeed if you would like to take up this offer of membership, please contact John Parsonage, the Programme Director for Open Water
(e-mail: john.parsonage@paconsulting.com
; Tel: +44 797 061 5309).
Yours sincerely
Sonia Brown
Non-Executive Director
Open Water Market Limited
Alan Sutherland
Non-Executive Director
Open Water Market Limited
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