United Utilities faces £25m bill

BRITAIN’S biggest water company is facing a £25m bill for a contamination failure that left 300,000 homes without drinking water for weeks on end.

A parasitic bug that causes diarrhoea and vomiting was found at one of United Utilities’s water treatment plants in August.

More than a quarter of a million homes around Blackpool and Preston were forced to boil drinking water for more than a month.

The company hopes that a Drinking Water Inspectorate investigation, which is expected to last for several more weeks, will establish the cause of the bug.

In a trading update, United Utilities said the £25m charge was its best estimate of the costs of compensating customers for the shortcoming.

Analysts at RBC said the figure was £10m higher than the figure it had expected.

United Utilities is expected to pay around £60 per household in compensation.

The company, which provides water and sewerage services for around seven million people in north-west England, said: ‘We were very disappointed that a significant water quality incident occurred this summer in parts of the Lancashire region, and we are continuing to investigate the cause.

‘We recognise the inconvenience this placed on many of our customers and are very grateful for their patience and understanding.’

The company said the hit – along with £5m of unrelated restructuring costs – would hit half-year profits.

Sales are expected to be similar to last year’s £860m figure, as the lower prices it charges because of regulatory rules are offset by higher levels of sales. Shares rose 13p, or 1.48pc, to 889.5p.