Thames Water, the UK’s largest water utility, has not been having such a good time of it so far this year; in March the utility was fined £20.3 million by the Environment Agency for what is being called the “biggest freshwater pollution case” and now it has just been fined £8.55 million by industry regulator Ofwat for missing leakage reduction targets in 2016-2017.
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The utility recently released financial results that revealed that it had missed the 2016/17 leakage target by 47,000 m3 per day, a figure which constitutes around 1.8% of its average daily production.
According to Ofwat, the £8.55 million fine, which is the maximum automatic penalty under the Performance Commitment Regime, must be paid by the company and may not be passed on to its customers.
A recently commissioned review of Thames Water’s trunk water mains showed that 0.19% of the trunk mains network is replaced per year, but the London Assembly Environment Committee said that at that rate it would take more than five hundred years to completely renew the network.
Steve Robertson, CEO of Thames Water, said: “Recognising that additional investment is required in some critical areas we’ll spend in excess of £150 million between now and 2020, above our original plans, to replace more ‘trunk’ mains, reduce leakage, improve some of our oldest sewers and upgrade the IT systems that underpin our customer service.”
Ofwat has opened an investigation to consider whether enforcement action is needed over and above the automatic penalty.
Cathryn Ross, chief executive of Thames Water, said: “The failure by Thames Water to meet the leakage commitments it has made to its customers is unacceptable. Our performance commitment regime imposes significant penalties for failure to deliver the levels of performance that customers have paid for and consequently, Thames Water will now face the maximum penalty. We take very seriously our responsibility to ensure that every water company is delivering for its customers and where they fall short, we do not hesitate to step in to protect customers’ interests.”
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