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PN 18/06 | 21June 2006 |
Ofwat statement on Thames Water's failure to achieve its leakage target |
Responding to today's announcement by Thames Water that it has failed to achieve its leakage target for 2005-06, Ofwat said:
"We have only just received the annual return from Thames Water. We are still awaiting the assessment from the Independent Reporter and will be scrutinising both carefully before deciding on regulatory action.
"We view as very serious Thames Water's significant failure to achieve its leakage target for 2005-06 by 34 Ml/d. This follows its failure to achieve its 2004-05 target by a smaller margin of 10 Ml/d. Given its current leakage performance we are concerned that the company may not meet future leakage targets or its security of supply commitments.
"Customers are paying the higher prices that Thames Water has been allowed to charge – an average increase of 24% over 2005-10, excluding inflation – without getting all the benefits that the company has promised to deliver. This is unacceptable.
"Although the current drought is the result of below average rainfall for two consecutive winters, we expect Thames Water to set a good example by controlling its leakage. The company's poor leakage performance is not only inefficient, it is also contributing to water shortages that have led Thames Water to impose a hosepipe ban and seek a drought order.
"Meeting its leakage targets should be a very high priority for Thames Water. We expect the company to spend as much as is necessary to remedy its leakage failure and ensure that it delivers value for money and security of supply for its customers.
Notes to Editors:
1.The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will allow companies to carry out their functions properly, and finance them. Its duties include protecting the interests of consumers, wherever appropriate by promoting effective competition. The Water Services Regulation Authority succeeded the Director General of Water Services on 1 April 2006.
2.Ml/d = Megalitres per day. A megalitre is the equivalent of one million litres. It would take 2.5 megalitres of water to fill an Olympic-sized swimming pool.
3.Thames Water's leakage targets were 860 Ml/d for 2005-06 and 905 Ml/d for 2004-05.
4.Reporters are independent professionals appointed by the company with Ofwat's approval. They scrutinise the company's business and report on the reliability and accuracy of company information and any concerns they have.
5.Media enquiries to Ofwat Press Office on: 0121 625 1416/1496/1442.
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