Thames Water fined £8.6m for missing its leaking pipes target
THAMES Water has been fined £8.6m after missing its leak targets.
The company supplies water to households in west London, as well as sewerage services for the rest of the county.
Earlier this year a rival company warned customers to save water amid fears of a shortage.
After a year of “challenges”, Thames Water’s profits have crashed 86%.
The company said it missed its target for cutting leaks by 47 million litres a day after a series of high-profile burst water pipes in London last year. Regulator Ofwat said the £8.6m fine was the maximum allowed and “cannot be passed on to customers”.
Cathryn Ross, chief executive of Ofwat, 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 penal- ties for failure to deliver the levels of performance that customers have paid for and, consequently, Thames Water will now face the maximum penalty.”
The group was hit with a record £20m fine in March for allowing 1.4 billion litres of raw sewage into the River Thames between 2012 to 2014.
Britain’s biggest water company saw pre-tax profits slump to £71.1m for the year to March 31 from £511.2m the previous year as it was hit by higher costs and losses on the value of its own debt.
On an underlying basis, operating profits fell sharply - down 18% to £605m.
Its annual report revealed that recently hired chief executive Steve Robertson picked up a £54,000 annual bonus despite the gloomy set of results.
Thames Water said the potential bonus was trimmed as a result of the firm’s performance. His total pay stood at £460,000, including the bonus and a pro-rated £550,000 annual salary after taking on the top job in September last year.
Thames Water revealed that it caused 315 pollution incidents in 2016 – higher than last year but below its 340 target.
The group added that it received an £8.6 million regulatory penalty for missed leak targets.
Mr Robertson said: “We fully accept our responsibility for our legacy issues and our focus now is to ensure resilience in our provision of essential services and delivering maximum value for our customers.”
He added: “Although we faced challenges during the year, the underlying performance of the business last year was sound.”
Australian group Macquarie sold its last remaining stake in Thames Water earlier this year, ending more than a decade of investment in the utility giant.