Water watchdog to fine Thames Water

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

Thames said it would challenge the fine, which would only harm its ability to fix London's leaky water system.

Ofwat said there was no evidence of fraud or deliberate misreporting by Thames, but proposed a fine of 11.1 million pounds for sloppy reporting of non financial information, largely customer service data.

Thames faces a further 1.4 million pounds fine because its failings meant customers were not compensated when service levels slipped, said Ofwat, which was recently criticised by politicians for being too soft on water companies.

Thames said it had alerted Ofwat as soon as it discovered the problem and the missed customer payments amounted to less than 500,000 pounds.

"We can see no justification for the level of the fines proposed," said Thames Water Chief Executive David Owens who took over last December after Thames was bought by a group led by Australia's Macquarie Bank.

"They are totally disproportionate," said Owens. "What particularly concerns us is this large sum of money could be spent directly on improving services to customers, but the only benefit will be to the Treasury."

Thames Water said in June it was planning to spend nearly 1 billion pounds in the coming year and to dig up 540 km of London's leaky pipes, hoping to avoid a repeat of the costly drought induced water shortages of 2006.

"Thames' reporting systems were inadequate," said Ofwat Chief Executive Regina Finn. "Deficient systems and low business priority on reporting non financial data led to these serious failings."

"Our proposal to fine Thames reflects this and gives a clear signal ... that non compliance is not a cheap or easy option," she said, adding that Thames' shareholders and not customers would have to shoulder the costs of improvement.