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Six water companies fail on leakage

Six out of 21 water companies failed on leakage targets in 2009-10 and could face fines if the problems persist, a new report by water sector regulator Ofwat has revealed.

Managing leakage is an “area for concern”, said Ofwat’s Service and Delivery report. Cambridge (1.4% over leakage target), Dee Valley (2% over), Northumbrian (Essex and Suffolk 1.5% over, North East 3.3% over), Southern (3.3% over), Veolia Central (3.6% over) and Yorkshire (7.3% over) were the six companies identified.

Ofwat is still investigating Yorkshire Water’s leakage failure. All of the six companies except Cambridge will now be monitored so that Ofwat can “take appropriate action” should these companies fail their leakage targets in the future.

“We take any leakage failures seriously. If companies continue to underperform, we will take action.”

Regina Finn, Ofwat

Ofwat chief executive officer Regina Finn said: “We take any leakage failures seriously. Most companies stepped up to the challenge of tackling leakage during a particularly harsh winter. Those who haven’t, we have put on-notice. If companies continue to underperform, we will take action.”

Thames Water (in 2006) and Severn Trent (in 2007) whave been made to pay out a combined total of an extra £195M to address leakage failures in the past.

However, Ofwat said last winter’s severe weather may have made it harder to tackle leakage. “Snow covered ground can make identifying leaks more difficult, and all companies reported high numbers of burst pipes because of ground movement caused by freezes and thaws,” said the report.

Regulatory action

Otherwise, the report said water companies continue to deliver good levels of service to most consumers. It said drinking water quality is competitive with the best in Europe, all water companies achieved their targets to ensure appropriate supply levels to meet customers’ needs, and complaints have fallen to their lowest level for four years.

All companies met their leakage targets in 2008-09. Between 2005 and 2010 leakage has been reduced by more than 300M.l a day. Where companies have underperformed, regulatory action has seen companies pay out more than £500M of their own money. About £75M of this has been through fines.

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