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16/12/2009
Heidi Mottram, of Northern Rail, will join the utility, which serves 4.4 million people in the North East and Essex.
Northumbrian Water Group has hired one of the rail industry’s leading lights as its new chief executive.
Heidi Mottram, managing director of Northern Rail, will join the water company, which serves 4.4 million people in the North East of England and Essex, in March, replacing John Cuthbert, who signalled last summer that he planned to retire.
Ms Mottram, a former British Rail graduate trainee, joins the company just before it begins a new five-yearly price regime.
Northumbria yesterday became the first water company to accept the price limits that Ofwat proposed last month and it will not challenge the ruling at the Competition Commission. The group confirmed that it will be able to maintain its policy of increasing the dividend annually by 3 per cent before inflation.
Sir Derek Wanless, the chairman, said that he was confident that Ms Mottram had the experience and the background to make the jump from the rail industry to the water business.
“She comes from an industry that has a lot of similarities to water in its structure and we think that she will fit in with our culture very well,” Sir Derek said.
Ms Mottram joined Northern Rail in 2005, after the rail franchise was created from parts of two existing franchises. Northern Rail is a joint-venture company run by Ned Railways, the Dutch railway, and Serco, the services business. She has won a reputation for challenging orthodoxies in the rail industry and introducing new ideas. This year she was named Rail Business Manager of the Year for being an “inspirational leader”.
Ms Mottram has also worked closely with the local community and increased the rail group’s focus on customer services. While she has been running the railway, passenger numbers have risen by 31 per cent.
At Northumbrian Water she will have to oversee several big projects over the next few years including a new reservoir at Abberton, Essex, and two new anaerobic digestion plants that will convert sludge into energy, in the North East.
Northumbrian Water was judged to have one of the more lenient settlements from the water regulator. Other companies, facing much stricter price caps, are considering appealing to the Competition Commission over the price determination.
Ofwat’s proposals allow Northumbrian to increase average annual household bills by £14 to £313 from 2010 to 2015.
The proposals include an investment programme of more than £1.2 billion across the areas served by the Northumbrian Water subsidiaries in the North East and Essex & Suffolk Water in the South East. This includes a significant sum to address sewer flooding, which has been a particular problem in the North East in recent years.
Chris Green, finance director at Northumbrian, said the company had “stress-tested” Ofwat’s proposals against its dividend policy.
“Overall our financial position isn’t as stretched [as some other water companies] and we have a stable credit rating,” Mr Green said.
Analysts have been warning that some of the UK’s biggest water companies, including Severn Trent, may have to cut dividends or conduct rights issues to bolster their balance sheets.
The Ontario Teachers’ Pension Plan, which owns 27 per cent of Northumbrian Water, has been an investor in the business since 2005.
TIMESONLINE - http://www.timesonline.co.uk/tol/news/