Welsh multi-utility Hyder has axed development of a costly customer services system for the second time in three years, writes Steve Ranger.

The utility refused to say how much its cancelled Hyder Customer Service Electricity (HCSE) project cost, but a similar cancellation in 1996 cost £35 million. Hyder blames regulatory changes made after development of HCSE began. However, one rival utility said any such system should have been able to cope with those changes.

One hundred and fifty contractors have left the utility and although no redundancies are being made at this stage, Hyder said staff working on the system 'are being consulted'. Three managers left the utility during the project review, which was completed in the last fortnight.

HCSE was intended as a billing and customer enquiry system to deal with water, electricity and gas customers.

"Instead of pursuing HCSE with radically changed specifications, we decided to adopt a different IT solution," said Mike Harrington, managing director of Hyder's services business.

However, Michael Cock, operations manager at Sutton and East Surrey Water, said: "A system must be able to adapt to regulatory changes, and must be sophisticated and easy to use. If a system has been specified incorrectly in the first place, then problems adapting to new circumstances will simply get worse."

In 1996, Hyder abandoned its part in a £100 million customer service system codenamed Croeso, which was being jointly developed with IBM, South Western Electricity and South Wales Electricity (Swalec).

The system was dogged by delays, and Hyder - which acquired Swalec after the development began - said it would be more cost effective to extend systems in use at Welsh Water. Eventually, all players abandoned Croeso.

- Additional reporting by Sean Samuels.