By Michael Alexander

THE COMPANY which runs the Guardbridge paper mill in North East Fife yesterday expressed anger that it is facing a 63.8% increase in water charges on last year, despite no increase in the amount of water the company is using.

Curtis Fine Papers, whose mill is ironically sited next to copious amounts of water at the River Eden, said the massive hike in charges comes despite an overall revenue cap on water charge increases set by ministers of the Scottish Executive for 2002-2003 of 7.8%.

Individual company payments are determined by Scottish Water and the Water Industry Commissioner.

Despite the increase, however, the company offered an assurance yesterday that the increase would not have an impact on jobs and production, although the extra charges would clearly have some effect on profitability.

Paul Egan, operations director of the independent Scottish company, said, “Despite complaints to the Water Industry Commissioner and correspondence with Scottish ministers, we are obliged to pay this increase.

“We were even threatened with higher charges if we did not agree to pay the increase and sign up to a three-year ‘deal’ by the end of September 2003. In the three-year deal, only the first year charges are held, with the second and third year charges to be set according to new tariffs.”

Curtis Fine Papers has established a reputation as an environmentally responsible company and has invested considerable resources in effluent treatment, waste minimisation schemes, energy efficiency, recycling and many other ways to minimise the effects of its operations on the environment. Water is one of the main raw materials in the manufacture of paper.

Mr Egan went on to stress that time and resources spent on these activities have no direct benefit in terms of profit. They recognised, however, that they are necessary for the safe and responsible operation of the business.

He continued, “The difficult trading conditions we are currently facing mean we have no possibility of passing any of the 63.8% water charge increase on to our customers. We would rather be investing money in developing more high value products for our markets than spending it on hugely fluctuating costs that are outwith our control.

“Curtis specialises in creating and marketing high quality uncoated fine papers for graphic designers, printers and publishers. A major manufacturing employer in Fife and Midlothian, the company employs 424 people across its two sites in Scotland.

“We are investigating other potential sources of water and stepping up our programme for the internal recycling of water—activities that cost a considerable amount.”

Last night a Scottish Water spokeswoman said the water authority had undertaken a consultation exercise to inform both business customers and business representative groups of the new charging structure.

She said, “The first time business customers were advised of the new charges was in a letter in February. Since then we have been continuing to communicate with customers, particularly through our dedicated key customer management and business and community relations units.

“We are always willing to meet with our customers to explain the new charges, discuss their concerns and to look at better ways of managing their water resources. This makes sure they are only using and paying for what they need.

“In addition, we are having detailed discussions with business representative groups to look at direct ways of helping businesses understand and deal with their water charges.

“It should also be stressed that with the formation of Scottish Water, these charges are lower than they would have been under the three previous water authorities and that there have been winners as well as losers in this year’s scheme of charges.

“In fact more than 20,000 businesses have benefited by seeing their annual charges reduce.

“The scale of percentage rises being highlighted by some businesses should also be put into context. For example, a small business which claims it is facing a 250 per cent rise equates in reality to a rise from £96 to £336—still less than £1 a day.

“Scottish Water believes the new charges are much more reflective of the cost of providing a water and waste service to a business 24 hours a day, 365 days a year.

“The new 2003/4 scheme of charges has been approved by the Water Industry Commissioner for Scotland and is in accordance with his Strategic Review of Charges for 2002/6 and required harmonisation of charges across Scotland and more cost reflective charging.

“We will take on board the views of our customers about charges, including the relative burden borne by different groups of customers, when preparing our 2004/05 Scheme of Charges for submission to the Water Industry Commissioner.”