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Thames Water gets £12m fine for “poor service”

October 9, 2007 at 11:48 am

Britain’s largest water company, Thames Water is facing a colossal fine to the sum of £12.5 million. Indeed, after an official investigation last year, water regulator Ofwat has ruled that Thames Water has failed its customers on a number of different grounds, such as a poor quality of service and a breach of official rules.

Ofwat has said that, out of the £12.5 million fine, £11.1 million was because of a failure to provide “robust information” to the regulator, whilst the other £1.4 million was for poor service provided to customers. For example, some had not received the money they had been entitled to and many had received a loss in water supply. Though the sum comes as a huge and somewhat extreme blow to Thames Water, Ofwat insists that the fine is proportionate to the seriousness of the failures experienced by customers.

What Thames Water has done is particularly concerning, they say, because water is a monopoly business and quality is therefore vital given that customers have very little choice but to comply with existing procedures. Though Ofwat admit that there is no evidence of fraud from the company and that any misreported information hasn’t been deliberate, they still believe that the various ways in which the company has let customers down is enough to warrant a fine.

Contrary to popular opinion, full consideration was in fact given to Thames Water’s efforts to remedy the situation as well and all the details have been taken into account before the decision was reached. Furthermore, Ofwat say that the new improvement costs and the cost of the fine will not be paid by customers but by shareholders.

Thames Water maintain that the fine is “disproportionate” and undeserved. In a statement on their website, the company say that they will be appealing the decision as they believe that the fine is unreasonable, especially considering Ofwat already accepted that the company has gone to great lengths to remedy the situation. Thames Water also believe that the fine will actually mean it is the customers who lose out.

As Thames Water Chief Executive David Owens points out, the money which they are being asked to give as a fine could be put towards improving the very service that the dispute is about. This fine, however, will simply benefit the Treasury and nothing more.

This concern has also been expressed by David Bland, chairman of the Consumer Council for Water Thames, who says that the money would be best off either going to the customers or used to improve Thames Water’s service. Given that the very purpose of any fine is to improve services rather than punish, this makes good sense to most people.

The fine is thought to be the biggest ever fine given by the water regulator. However, under regulations, it is perfectly permissible. In fact, Ofwat has the right to fine a company up to 10% of its annual turnover. For Thames Water, it may come as a surprise that this actually comes to around £1.35 billion according to last year’s figures.

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Welsh water company fined for polluting river

October 2, 2007 at 11:36 am

A Welsh water treatment plant has been charged and fined with polluting a nearby river and killing hundreds of fish, and not for the first time. Over 1,800 fish, mostly trout, were killed in July 2007 when the company Dwr Cymru Welsh Water was responsible for sewage contaminating a nearby river tributary at the River Cynon. The Environment Agency were called at the time and the company were forced to bring in independent contractors to oversee the blocking of the flow and the return of the river to safety standards for wildlife.

Dwr Cymru Welsh Water pleaded guilty in court for the contamination of the river with raw sewage and they claimed it was due to a technical problem in the plant. They were fined £10,000 as well as having to pay £4,420 for further prosecution costs. Section Four of the Salmon and Freshwater Fisheries Act 1975 and Section 85 of the Water Resources Act 1991 were broken.

The Environment Agency Officer spear-heading the case Mr Joseph Barr commented by saying “This incident caused significant damage to fish populations of the Nant-Y-Wennalt Stream and part of the costs awarded will be used to restock it. It is also hoped that this successful prosecution will lead to improvements being made to prevent any further incidents of this nature.”

However, such incidents are commonplace in Welsh rivers. In July this year, the same water company was fined £5,000 for pollution a river near Wrexham. In September 2003, Dwr Cymru Welsh Water again were fined £12,500 for polluting the River Clyne and killing over 3000 fish. There was a similar incident in 2005, where no action was taken, and again the same company in February 2007 were fined for polluting the River Ewenny with milk and milk washings, costing the lives of hundreds of fish and insects in the river.

There have been numerous other similar incidences all over the UK. It might not carry as much weight as something like Foot and Mouth disease but it’s clearly a problem that isn’t being dealt with properly and requires extra attention.

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