By Lauren Howells
Thames Water £120 million to customers, following an Ofwat investigation which discovered that the company’s board did not have “sufficient oversight and control” of its leakage performance.
Each customer due to get approximately £15 over next two years
Thames’ customers, of which there are around 15 million, are due to get a total rebate of approximately £15 each over the next two years. According to Thames Water, on their 2019/20 bills.
The £120 million that Thames’ shareholders will return to customers, includes the £65 million that Thames Water has agreed to pay back to customers and the £55 million of automatic penalties it has incurred for missing the commitment it made to customers to cut leaks.
The regulator has said that following its investigation, Thames Water has committed to bringing forward the payment of these automatic penalties.
Thames Water breached two of its legal obligations
The investigation undertaken by Ofwat discovered that Thames Water had breached two of its legal obligations through “poor leakage management”.
The regulator concluded that Thames Water’s Board and management had not paid enough attention to reducing leakage.
It accused the company of underestimating “the significance of its underperformance on leakage when assuring Ofwat that it was meeting its statutory obligations”, such as delivering an efficient and economic service.
“Thames Water failed its customers in tackling leakage…”
Chief Executive of Ofwat, Rachel Fletcher said:
“Thames Water failed its customers in tackling leakage and the measures we’ve announced today illustrate the scale of the company’s shortcomings and how seriously we take them”.
She described how high leakage not only creates unnecessary strain on the environment but also results in excess costs for customers and an increased risk of water shortages.
All water companies have been tasked with bringing down leakage by “at least” another 15% up to 2025.
Ms Fletcher added that although customers didn’t want to see their water company “letting them down like this”, Ofwat hoped that the rebate would go some way towards compensating them for Thames Water’s failure to “live up to its commitments to cut leakage”.
Thames Water has said it will do more to engage with customers on leakage issues
Thames Water has committed to getting its leakage performance “back in line” with what it had promised it would deliver in 2019-2020.
According to Ofwat, the water company has also committed to making additional leakage reductions of 15% by 2025 and has said it will do more to engage with customers on leakage issues.
Steve Robertson, CEO of Thames Water, apologised to its customers for letting them down and admitted that its recent performance with regards to leakage targets had “not been good enough”.
“We have taken more control of how we manage the network and are investing significantly more in people and resources to tackle leakage, get back on track and then go beyond. Thanks to these changes already in place, our current leakage repair performance is our best ever at around 1,000 a week. Our focus is to restore customers’ trust and confidence in Thames Water,” he added.