Published: 10 July 2006
Thames water avoids penalty shoot-out
With Thames Water’s ability to meet its leakage targets on par with the accuracy of the England penalty takers, both the Consumer Council for Water and Defra have welcomed Ofwat’s decision to legally bind Thames Water into carrying out repairs worth £150 million in addition to their normal commitments – over double the maximum imposable fine.
The undertaking will replace 368km of mains at the expense of its shareholders and commits the company to achieving demanding future leakage targets and security of supply for Londoners and other Thames customers by March 2010.
Ofwat has promised that the company's progress will be closely monitored and that subsequent failures would lead to further enforcement action, including fines if appropriate, from 2007.
The Consumer Council for Water has asked that the company deliver either rapid and recognisable improvements or a rebate to its customers who faced an average 20% bill increase last year.
The company has not met its targets on cutting leaks in four successive years, despite this work being one of the main reasons for the bill rise.
Dame Yve Buckland, Chair of the Consumer Council for Water, said:
“Thames took consumers' money without delivering on their promises - it is only right that they should give back what they owe to their customers, and this is what we have been pushing for.
However, this is better returned in the lasting form of improved services, rather than a financial penalty on the company which would simply swell the Treasury's coffers without directly benefiting consumers."
Beyond the issue of consumer trust, the company's leakage performance has worsened the current water shortages.
The dry weather conditions continue to create very serious problems in the South East, and consumers need to reduce their use of water if we are to avoid further and more serious restrictions; but the company must show it is fulfilling its half of the bargain by getting on top of leakage."
Thames Water conceded last month that it loses 894 million litres of water each day from its network - enough to fill 358 Olympic swimming pools.
Dame Yve added:
"Thames has been in danger of eroding the consumer confidence and goodwill that it will need from consumers when asking them to save water this summer - we hope that Ofwat's action will now concentrate their minds on delivering secure supplies of water and value for money to customers.
CCWater has urged Thames Water, should it get a drought order, to apply the powers very sensitively to avoid endangering the livelihoods of water-dependent businesses.
Meanwhile, CCWater continues to encourage customers to save water.
Further information
Five fast fixes for households on water saving - CCWater
CCWater
Press release - Ofwat
Thames Water
Consumer blog on the current water restrictions - CCWater
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