Six water companies fail leakage targets

Six water companies have failed to meet their leakage targets according to the annual report from the Water Services Regulation Authority (Ofwat).

The companies were Southern, Northumbrian, VeoliaCentral, Dee Valley, Cambridge and Yorkshire.

Ofwat has outlined what the companies need to do to restore their performance and have increased their reporting requirements.

The worst performer was Yorkshire Water which lost on average 295 million litres a day from 2009-10 and was 7.3% over its target.

Ofwat has previously taken action against companies following serious and consistent underperformance on leakage. Thames Water (in 2006) and Severn Trent (in 2007) committed a combined total of an extra £195 million of their own money to address failures. Since then, both companies have significantly improved their leakage performance.

Ofwat set this against a background of very difficult weather conditions. Between the years 2005 and 2010 extreme weather resulted in drought conditions, severe flooding and cold winters, with 2009 being the coldest winter in more than 30 years. Overall, water companies were found to have maintained supplies during this extreme weather.

The report also raised concern about the number of properties that were flooded as a result of overloaded sewers and the lack of consistency in reporting and the poor quality of data.

Ofwat chief executive, Regina Finn, said "If companies continue to underperform, we will take action. In the last five years, companies have had to pay out more than £500 million, from their own pockets, following underperformance.

"We've made sure that the bulk of this money has been spent on giving something back to customers - either through reduced bills or investment in improving services.

"That's why when certain companies consistently failed to manage leakage, we made sure they invested an extra £195 million of shareholders' money putting the problem right.

"Although last year's leakage failures did not put customers' supplies at risk, future challenges such as climate change and population growth mean that valuing this precious resource is more important than ever before."

The report balanced this, however, with the performance of all companies in general, saying consumer complaints were at their lowest since 2005 and the companies were operating well despite difficult weather conditions. The quality of drinking water in England and Wales was also highlighted as being comparable with the best in Europe.

Ofwat was pleased by the way companies responded to the challenge of carbon accounting and believe that the quality of data is improving.

On the environment, Ofwat reported that water and sewerage sectors delivered 99% of the National Environment Programme, a list of environmental improvement schemes that ensure the companies meet national and European targets related to environmental water quality.

These schemes aim to improve sewage treatment facilities and systems, treat and dispose of additional sludge and investigate the impacts of other assets on habitats, river and coastal water quality. Alison Brown



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