Thames Water, Yorkshire Water, and Northumbrian Water may face fines of £168m from the industry regulator due to their historic sewage spills. The proposal has been submitted for public consultation and is part of the largest ever investigation by Ofwat into water company performance. The announcement comes amidst growing public concerns about the poor environmental and financial performance of some water companies. According to recent data, sewage spills into England’s rivers and seas doubled last year.
Ofwat has discovered that these three companies have repeatedly released raw sewage into the country’s waterways due to inadequate network investments and maintenance. The regulator’s CEO, David Black, pointed out that the companies routinely released sewage into the rivers and seas rather than ensuring it only occurred in exceptional circumstances as the law required. Releasing raw sewage has a significant impact on the environment and poses a risk to human health for those swimming in contaminated water.
On Wednesday, Ofwat proposed fines of £104m for Thames Water, £47m for Yorkshire Water, and £17m for Northumbrian Water, as they failed to maintain their sewage works properly and allowed excessive spills from storm overflows. Ofwat can fine companies up to 10% of their annual sales. Thames Water is facing a 9% sales fine, which reflects the severity of the offence. The companies are expected to respond to the proposal soon.
The UK’s water companies have proposed raising their customers’ bills by more than 44% over the next five years to fund improvements in water infrastructure. Thames Water requested an increase of £191 over the next five years, but Ofwat only agreed to £99. There is growing public concern that water companies are putting money into executive bonuses rather than infrastructure upgrades. Earlier this year, environmental campaigners called for a ban on executive bonuses, a payout review, and an earmarked fund for upgrades. The government is currently examining plans to ensure that money intended for infrastructure improvements cannot be spent on salaries or dividends.
The possibility of new fines raises concerns about how much some of the water companies can afford to invest in infrastructure upgrades. For example, Thames Water has struggled with £14.7bn of debt, and its debts’ credit rating is at risk of being downgraded. Commenting on the issue, Ofwat’s CEO David Black said that they had the power to impose fines and would collect them if the companies failed to pay them. Secretary of State for Environment, Food, and Rural Affairs, Steve Reed, welcomed Ofwat’s action and called for fundamental reform of the water sector
Read the full article from The BBC here: Read More
