LONDON, UK – The UK’s largest utility, Thames Water, has been fined £8.55 million by industry regulator Ofwat for missing leakage reduction targets in 2016-2017.
Financial results released by the utility revealed that it missed its 2016/17 leakage target by 47,000 m3/day – representing 1.8% of its average daily production.
The news follows a recently commissioned review of Thames Water’s trunk water mains, which found that 0.19% of the trunk mains network is replaced per year.
The London Assembly Environment Committee, which will hold a meeting with utilityexecutives tomorrow, said “at this rate it would take over 500 years to completely renew the network”.
Commenting on the financial results, 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.”
Regulator Ofwat said the £8.55 million fine, which is to be paid by the “company alone and cannot be passed on to customers”, is the maximum automatic penalty under the performance commitment regime.
In addition, Ofwat has opened an investigation to consider whether enforcement action is needed over and above this 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.”
In March the utility was fined £20.3 million by the Environment Agency for what is being called the “biggest freshwater pollution case”.