Water giants face fresh crit­i­cism over win­ter storm leaks

The Sunday Telegraph - Money & Business - - Business - By Jil­lian Am­brose

WATER in­dus­try bosses are braced for re­newed crit­i­cism this week af­ter thou­sands were left with­out water in the wake of the “Beast from the East”.

Fol­low­ing the storm, which struck in Fe­bru­ary and again in March, Ofwat’s new chief ex­ec­u­tive Rachel Fletcher promised that the reg­u­la­tor would “get to the bot­tom” of why thou­sands of peo­ple were left with­out water for days. It is ex­pected that she will de­liver the first ma­jor ver­dict of her tenure this week. “We’ll find out where com­pa­nies did well by their cus­tomers and where they’ve fallen short, in­clud­ing the com­pen­sa­tion be­ing of­fered to those who were di­rectly af­fected,” she said when launch­ing the in­quiry.

The sud­den freeze and thaw of water pipes across the coun­try as the Siberian storm swept in caused ma­jor pipe bursts, at one point leav­ing 20,000 cus­tomers in the South East with­out water. Thames Water, which sup­plies a quar­ter of the UK’S pop­u­la­tion, said it pumped 500m litres a day through the net­work to avert water short­ages caused by the leaks.

The util­ity al­ready faces reg­u­la­tory penal­ties of £120m for breach­ing Ofwat’s leak­age tar­gets and a po­lit­i­cal back­lash against the com­pen­sa­tion it of­fered to cus­tomers left with­out run­ning water.

Thames agreed to go be­yond the statu­tory min­i­mum for pay­outs and pay those cus­tomers worst af­fected up to £150, but drew the ire of MPS af­ter many cus­tomers later re­ceived let­ters of­fer­ing £30 in com­pen­sa­tion. FTSE water com­pa­nies Sev­ern Trent and Pen­non, which owns South West Water, also fell foul of the reg­u­la­tor’s stan­dards on leak­age as a re­sult of the storm. Pen­non said that dur­ing the ex­treme “freeze and thaw”, South West Water’s staff and part­ners “worked tire­lessly” to re­store sup­plies as quickly as pos­si­ble.

The water com­pany still earned a penalty of £900,000 for fall­ing short of leak­age tar­gets. If not for the freeze, Pen­non said South West would have earned a £100,000 re­ward for the year.

Strik­ing a chord The pop­u­lar­ity of stream­ing ser­vices such as Spo­tify helped Domino Mu­sic Group, the in­de­pen­dent record la­bel that rep­re­sents Arc­tic Mon­keys, above, post an 11pc rise in rev­enue to £24m last year. Prof­its grew 7pc to £1.9m.

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