OFWAT forces water company to spend £150 million on improvements

Council leaders are calling for urgent action to force Thames Water to reduce water leakages in the capital and improve its service to householders and businesses.

The Association of London Government called for water regular OFWAT to impose stiff fines on Thames Water and has warned that the company's repeated failure to reduce leakage rates has put the health and hygiene of Londoners at risk.

OFWAT responded to growing demands for real action by forcing Thames Water to spend an extra £150 million on improvements to the water network However the Government regulator has come under new fire for not imposing tougher measures. OFWAT has the power to fine Thames Water for missing its leakage target but instead opted to force Thames to spend more money on leak repair - thus ensuring a proportion of Thames' £346.5 million pre-tax profits go towards repairing the network.

ALG spokesman Cllr Merrick Cockell said "We now have a situation where Thames Water is applying for a Drought Order at goodness knows what possible cost to local businesses or at what risk to the public health of residents if water rationing is imposed. Year after year Londoners have seen their water bills rise and Thames Water's profits increase, yet this is the third year in a row that the company has failed to meet targets for reducing water leakages - this unacceptable situation just cannot be allowed to continue!"

Local Conservative MEP Mr Kamall welcomed OWFAT’s move but said a proportion of the extra investment should now be spent (on his particular crusade) to provide booster pumps for high-rise buildings that will suffer from reduced water pressure when Thames Water turn the network's pressure down in an attempt to control the leaks.

Mr Kamall said "OFWAT's decision is a step in the right direction forcing Thames Water to invest much of its profits in repairs and upgrades to the network. Thames must make sure this money is spent effectively on renewing our water network and speeding up repairs.

"Thames Water is losing the equivalent of 350 Olympic size swimming pools every day. That is totally unacceptable and undermines our efforts to encourage Londoners to conserve water. Now that the company is being forced to spend a good proportion of its profits on repairing leaks, it must finally start to get on top of the problem.”

July 4, 2006