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Gas can be a template for water

The Scottish water industry can learn from the example of gas, according to Steve Timoney

I AM TRYING to build a world class business in the utilities industry, but an even bigger challenge is making sense of its complications and legislation.

The most recent major development is the formation of Scottish Water, which is all but in place and which will take over the assets and functions of the three existing Scottish water authorities.

Scottish environment minister Ross Finnie wants to develop a commercially astute organisation accountable to the Scottish Parliament that will focus on delivering improved service to all customers at a fair price.

At the same time, he has ruled out any competition with Scottish Water in the foreseeable future.

For me, this is where the cracks start to appear in the Great Plan.Any commercially astute organisation is usually accountable to its customers and it's the pressure of intense competition that provides the benchmarks for fair prices and improved service.

The gas industry has been trying for some time to develop a framework that would provide customers with choices across a range of services.This can be a template for the future of the water industry.

My point is that competition has worked in the gas industry, and it can also work in the water industry.

Competition is a good thing. It forces us to become agile and customer-focused.To survive in a competitive world, we must become innovative.

The formation of Scottish Water will produce the fourth-largest water services provider in the UK and the twelfth-largest business in Scotland by turnover.

That is an outstanding platform for the development of a world class organisation capable of reaching well beyond its borders and perhaps developing into a trailblazing pan-European multi-utility business.

Why, then, is our first reaction to try to prevent border raids by other water companies by legislating against competition? Are we scared that someone else will offer the customer a better price, a better service, a better quality of water?

Access to our customers by other companies provides the motivation for everyone in my own organisation to continually improve what they do, to focus on the customer, to be accountable for their actions. No amount of legislation can provide the same motivation.What's more, the protective shell of a monopoly environment actively prevents organisations developing the agility necessary to survive.

Water competition will eventually make a march on the Scottish borders, escorted by the Competition Act 1998. Scottish Water may resist it in the short term with the help of legislation from the Scottish Parliament, but experience has shown that when customers demand choice, agile and enterprising organisations will find a way to deliver it.

The only way to defend against that is to embrace competition and drive change in your organisation around delivering value to customers time and time again.

My appeal to those most involved in the revamp of the Scottish water industry is this: face up to reality.We live in a world where we succeed or fail on our ability to understand the nature and significance of our customers' needs and strive continually to exceed them.

We should never seek to hide behind a legislative barrier to provide some comfort when we fail to achieve this.This only provides short-term protection. Ultimately, customers will get what they want: complete choice and the best possible service.The most agile companies will be the ones to succeed in delivering this.