Ofwat fines Thames Water £8.55m for missing leakage targets

Regulator Ofwat has fined Thames Water £8.55m - the maximum penalty - for failing to meet its commitments to reduce leakage in 2016-2017.

Ofwat said the penalty is borne by the company alone and cannot be passed on to customers. In addition, it has opened an investigation to consider whether enforcement action is needed over and above this automatic penalty.

Ofwat chief executive Cathryn Ross said: "The failure by Thames Water to meet the leakage commitments it has made to its customers is unacceptable. Our performance commitment regime imposes significant penalties for failure to deliver the levels of performance that customers have paid for and consequently, Thames Water will now face the maximum penalty.

"We take very seriously our responsibility to ensure that every water company is delivering for its customers and where they fall short, we do not hesitate to step in to protect customers’ interests.”

In its annual report and financial statements for 2016/17, Thames Water said its leakage has increased by 5% since last year to 677m litres a day, missing its target of 630m litres a day.

"Next year’s target is tighter and we are committed to a recovery plan aimed at bringing us back on track with our leakage targets by the end of the regulatory period," the company said.

Chief executive officer Steve Robertson said: "During the last year we’ve seen a series of major bursts on some of our Victorian water pipes and we’ve missed our leakage target. Leaks are inevitable on a network of our enormous size and age, but it’s vital we invest wisely and continually to improve our resilience. This is a huge priority for us."