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Severn Trent sailing ahead in Welsh water competition row.

Severn Trent Water yesterday scored early points in its court battle with Hyder subsidiary Dwr Cymru (Welsh Water), Western Power Distribution and United Utilities over an outsourcing arrangement.

The Birmingham-based water and waste disposal group said the High Court had ruled in its favour in respect of the proposed outsourcing of Dwr Cymru's operations.

The group's legal action has added a last-minute twist to the four month saga of the takeover of utilities group Hyder.

The pounds 565 million takeover of Hyder by US-controlled Western Power Distribution was confirmed earlier this summer, when rival bidder Nomura, the Japanese bank, withdrew.

Western Power Distribution agreed to outsource Hyder's Dwr Cymru Welsh Water operations to United Utilities as part of the takeover deal.

Severn Trent, which is trying to build its own water contract management business, claimed that the proposal to contract out some of Welsh Water's services to United Utilities was in breach of UK and European competition legislation.

It argued the contract should have gone out to open tender.

Severn Trent said the UK High Court had ruled in its favour 'in principle,' though technical issues relating to the contract were being dealt with separately.

'The issue of principle has now been resolved in Severn Trent's favour and the court is now expected to expedite the hearing on the technical issues relating to this particular contract,' it added.

Brian Duckworth, managing director of Severn Trent Water, also said: 'We are pleased with the High Court's decision and we now look forward to the court hearing the second half of the case.

'Severn Trent is determined to be a strong player in both supply chain competition and for new customers.

'We have always been committed to ensuring that a level playing field is established for all players.'

'We hope that Dwr Cymru will eventually put the contract out for open tender - at that stage Severn Trent would be delighted to compete for the business.'

John Roberts, chief executive of United Utilities, said: 'We note the High Court's ruling and will now be considering its implications.'
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Publication:The Birmingham Post (England)
Date:Oct 11, 2000
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