Inset appointments are made when an existing supplier is replaced by another as the supplier of water and/or sewerage services for one or more customers within a specified geographical area. There are three circumstances in which inset appointments can be granted:
- For customers supplied with 250,000 cubic metres or more of water per annum, or using the same volume of sewerage services. The Government plans to reduce this limit to 100,000 cubic metres later in 2000.
- For an area not being served by an existing undertaker - a 'greenfield' site.
- Where an incumbent agrees to change its boundary to allow part of its area to be transferred to another undertaker.
The inset appointment process was designed to allow the managed introduction of competition within the industry, however by 31 March 2000, only six appointments had been made. The Government believes that there is potential for greater use of the inset process, and additional proposals are out for consultation. For example, the reduction of the consumption limit to 100,000 cubic metres will increase the number of eligible customers from around 500 to around 2,000.
how to get an inset appointment
All applications for inset appointments must be referred to, and approved by, Ofwat. The Ofwat site contains a detailed description of the application process. In summary, the nine step process should take between sixteen and thirty weeks. The application requires the submission of a substantial package of information and the free exchange of material information between the applicant and the incumbent. Ofwat strongly recommends that parties who are considering applying for inset appointments discuss their proposals with Ofwat before a formal application is made.
how can waterexchange help?
According to the Government, competition in the industry could be enhanced by making a number of changes to the existing inset appointment process. These changes are either underway, or are under consideration by the water industry stakeholders. However, in advance of these changes, waterexchange believes that the number of applications could be increased in one of two ways, both of which will be facilitated by waterexchange;
1. Provision of information on the process, and the matching of service takers and service providers; it is the contention of waterexchange that the absence of a service that highlights the availability and nature of this process, and then quickly and efficiently brings together buyers and sellers has not helped in the development inset appointments. waterexchange will provide a bulletin board that allows existing and new customers who wish to seek an alternative supplier to post their high level service requirements anonymously. Prospective service providers will then be able to identify potential new customers and, through waterexchange, obtain more detailed information to allow them to assess the feasibility of an application, and subsequently make an initial approach to those customers.
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