.International investors in the UK water companies led a delegation at a meeting with the Treasury last week to warn that Ofwat’s tough PR19 plans are “unfinanceable” and express their concerns that the regulator has become politicised, according to a report in yesterday’s Sunday Times newspaper.

The newspaper cites Australia's IFM investors, German firms insurer Allianz and Deutsche Bank's wealth division,and GIC, the Singapore sovereign wealth fund,.

"among the issues raised was Ofwat's independence and the dangers of reacting to political pressure", the paper says.

In July Ofwat rejected all but three of the water companies' PR19 submissions in its initial assessment of their AMP7 Business Plans for the upcoming 2020-25 investment period. 

The investors are warning that Ofwat will be faced with a number of appeals against the decisions - the newspaper says that at least five companies are considering putting in appeals.

The Investors also want the Treasury to assess the financial resilience of the sector and asked whether the Competition and Markets Authority would have the resources to deal with mutilpe appeals simulataneously.

Commenting on the issue at a Moody’s investor conference earlier this month , Thomas Sharpe QC from One Essex Court Chambers, who has acted in most regulatory appeals in water, energy and communications, in the Competition and Markets Authority, and its predecessors, and in the High Court, said:

“The battle ground in most price control appeals lies in the notion of “financeability”, that the price control leaves insufficient revenue for an efficient undertaking to finance its functions.”