4 July 2006
Thames Water has escaped a fine after repeatedly failing to meet leakage targets.
Industry regulator Ofwat decided not to fine the London water firm but ordered it to invest £150 million to stop future leaks, after the utility failed to attain its leakage target for the third year in a row.
Thames Water was severely criticised for its loss rate of 894 million litres every day from its network of supply pipes, which is well above the regulator's maximum limit of 860 million litres.
Leakage failures have been made more striking in the face of rising profits at Thames Water. It recently announced that profits had risen by 31 per cent, while customer bills saw a 20 per cent increase.
Its decision to apply for a drought order from the Department of Environmental and Rural Affairs (Defra) has also been criticised.Further pressure on Ofwat to maximise the fine Thames Water faces was added by a London Assembly report, which estimated the firm loses around a third of the water it pipes and advises that funds raised from Ofwat fines should be given as a rebate to customers.
In response to the criticism it has faced, Thames Water has pointed out that it has to deal with an antiquated piping system running underneath the capital, claiming that in the built-up urban environment the water network is especially difficult to modernise and maintain.
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