Financial News

  • 5 June 2014, 21:04

Thames Water To Pay 86m For Sewer Blunder

Thames Water has agreed a settlement of 86m with the industry regulator over failures to properly report sewer flooding data.

Ofwat said the misreporting meant more homes were recorded by Thames as being at higher risk of sewer flooding than there was evidence to support, meaning customer cash may have been wasted.

The watchdog said the blunder covered the five years to 2010 but agreed no properties were placed in peril.

The settlement will largely be made up of a 79m regulatory accounting write-down, expected to result in 15.2m being shaved off bills over five years.

But Ofwat admitted it would mean the firm's 14 million customers benefiting to the tune of just 1 each annually.

Under the terms, Thames will also pay 2m into the independently-managed Thames Water Trust Fund to help customers struggling to pay bills.

A further 5m will support community projects including schemes to protect rivers and the environment.

Ofwat chief executive Cathryn Ross said: "We are satisfied that Thames has put right the problems that caused the misreporting.

"It's only fair that when companies make mistakes, they put it right and make sure customers are not out of pocket."

Thames responded: "We made a mistake in some of our 2009/10 sewer flooding statistics.

"Ofwat agree that this was not deliberate and we are pleased they have accepted our package of measures in response.

Thames, which has previously been fined for misreporting data and poor service, remains locked in a battle with Ofwat to raise its bills between 2015 and 2020.

The firm said last December that it wanted to raise bills by more than 10.4% over the cost of inflation because of its plans to invest 2.8bn in the Thames Tideway Tunnel, a major new sewer.

Ofwat will issue its final decision at the end of the year.

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