Thames Water is to pay £120M back to its customers after failing to control water leakage across its network.
Industry regulator Ofwat said the water company’s board did not have sufficient oversight and control of the company’s leakage performance.
The £120M is made up of a £65M payment on top of £55M in automatic penalties incurred by the company for missing the commitment it made to customers to cut leaks.
As a result, each Thames Water customer will receive approximately £15 over the next two years.
As part of the proposed settlement, the water provider has committed to getting its leakage performance back in line with its originally promised target for 2019 to 2020.
It will also publish a monthly performance report, appoint an independent monitor to certify monthly leakage reports, make additional leakage reductions of 15% by 2025 and do more to engage with customers on leakage issues.
Ofwat chief executive Rachel Fletcher said: “Thames Water failed its customers in tackling leakage and the measures we’ve announced today illustrate the scale of the company’s shortcomings and how seriously we take them.
“High leakage creates unnecessary strain on the environment, excess costs for customers and increased risk of water shortages. A well-run water company will have a good understanding of the condition of its pipes and will be able to reduce leakage over time.
“Ofwat has set all water companies a target of bringing down leakage by at least another 15% up to 2025 and expects further reductions beyond this date.”
Last week the Environment Agency released its first major report on water resources in England, in which its chair said unless engineers plug the leaks, England could face serious water shortages by 2050.
In response Anglian Water said it was the first water firm in the UK looking at using drones to detect leakages using thermal imagery. United Utilities, which serves the North West of England said it had used ex-military dog trainers to teach a Cocker Spaniel named Snipe to sniff out underground leaks in rural water mains.
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