THAMES Water is one of three water providers which could be fined in one of the largest ever investigations by regulators into performance.
Regulator Ofwat has examined the levels of service provided by Thames Water, Yorkshire Water, and Northumbrian Water amid continued criticism of the environmental and financial performance of providers across the country.
The three companies were judged to have provided inadequate investment into their networks, which in turn caused continued sewage outflow into natural waterways, which more than doubled last year according to figures from the environment agency.
Following the investigation, Ofwat announced today (Tuesday, August 6) that it is proposing fines of £104 million for Thames Water.
Reading Today reported last month that the company has already amassed more than £15bn in debts, a jump of more than £1bn in just the last year, and could collapse next year if it doesn’t see any further funding.
Its financial reports from July indicate it has around £1.8bn in funding, which Thames Water says will fund its operations for only 11 months.
This means the company could be set for collapse in May, even without further fines.
Thames Water stated its intentions to seek further funding from investors as well as to raise bills by just under 60%.
It proposed a price increase of £191 to the average bill over the next five years, but Ofwat agreed to a rise of only £99, despite environmental campaigners arguing that money from customers bills isn’t being invested in infrastructure to reduce sewage letting.
The government is also consulting on plans to confine the spending of money set aside for infrastructure to upgrades and ensure that it cannot be used to pay dividends or salaries.
David Black, chief executive of Ofwat, said that the regulator had seen a “catalogue of failure” from the three providers over sewage spills.
Ofwat also announced proposals of fines of £47 million for Yorkshire Water and a further £17 million for Northumbrian Water.
Environment secretary Steve Reed welcomed the fines, saying: “The unacceptable destruction of our waterways should never have been allowed.
“It is right that those responsible for illegally polluting our rivers, lakes and seas face the consequences.”
He also said that the government would “fundamentally reform” the water sector.
Ofwat’s proposals of fines have now been put to public consultation.
A spokesperson for Thames Water said: “We have been notified by Ofwat that it has reached the next stage in its investigation on our management of wastewater treatment works and our sewer network.
“We take this matter very seriously and have cooperated at every stage of Ofwat’s investigation– we regard all untreated discharges as unacceptable, even when they are permitted, and are taking action to improve the health of our rivers as a key area of focus and investment.”
They continued: “This is the latest stage in the investigation process and we will continue to cooperate fully.
“Where appropriate, Ofwat may decide not to issue an enforcement order, or decide to impose a reduced or no financial penalty at the conclusion of the consultation period, in light of a commitment from the company to taking appropriate measures to secure compliance and provide redress for failures identified.
“We are encouraged that Ofwat recognises that in order to resolve the issues identified any redress needs to be deliverable, affordable, and financeable.”
They explained that Thames Water would: “continue to engage with Ofwat and will respond to the consultation in due course.
“The investigation by the Environment Agency into all water and wastewater companies in England and Wales continues.
“Currently, there is no indication of any date for this investigation to reach a conclusion.”
