Re-Research25 Oct 2014 12:49
It's the typical business budget scenario, UU will ask for possibly more than it thinks it can can get and Ofwat will try to reduce costs as much as possible.
From past experience, Ofwat’s assessment of acceptable costs is often negotiable when water companies submit plans for super-projects.
Also the article states the following:
"Ofwat disallowed £990m of proposed costs from United's business plan, with no other water company having even a quarter of that level."
For a start not all water companies are the same size or have the same requirements, let alone business plans, so the figure of £990 million is not set into intelligible context.
Additionally, UU has since revised business plan that cut the gap between its investment budget and regulator Ofwat’s from circa £1bn to £628m.
The old story - ask for more and if you don't you will get even less.
You don't ask, you don't get.