London water bills could rise

July 10, 2009 at 1:21 pm

Residents of London are about to see their water bills rise as Thames Water embarks on a programme to prevent the ageing pipes in the system from falling into further decay. London has 1,300 miles of old pipes, an amazing 20% of which are over 150 years old, and the fear is that without improvements being made they will simply leak too much water.

On top of the repairs to the pipe network, Thames Water is also planning to construct two enormous sewers that will help to extract raw sewage from the Thames, and again customers will be underwriting the costs.

As a result, bills are expected to rise by 17% above inflation over the course of the following five years, a move which will affect all 13.6 million customers. The company has to submit its proposals to Ofwat, the industry regulator, which will decide whether to approve them or not. But there is little hope for customers as the repairs and improvements are seen as essential.

If the price rise is approved, Londoners will see their bills going up from an 81p to £1 a day.

However, the announcement of the price hike has been made just after Thames Water revealed profits of £431.1 million before tax, which is not going to go down too well with customers. No one is going to be happy about having their bills increased during the recession anyway, but to see them go up when the high profits have been revealed is worse still.

Thames Water, however, released a statement saying that if it does not get approval to make the “essential investment” then “customers will pay more in the long term”.

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