28/09/2007

Thames Water Fined £12.5 Million

Thames Water has been fined a total of £12.5 million by industry regulator Ofwat, it has been revealed.

Ofwat said that the company had been fined for failing to provide it with "robust information" and because poor processes and systems meant that customers received poor service.

Regina Finn, Ofwat Chief Executive, said: "Water is a monopoly business and until we see a competitive market developing Ofwat must protect customers by regulating the companies' prices and quality of service. To do this, we need complete, accurate and reliable information. Misreporting of information damages our ability to regulate the industry and therefore to protect customers.

"Thames' reporting systems were inadequate. 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 to both the company and the water industry that non-compliance is not a cheap or easy option."

The proposals follow Ofwat's 2006 investigation into Thames Water's reporting of its customer service performance. The regulator said that Thames acted responsibly by informing Ofwat of the misreporting, taking steps to investigate the situation itself, co-operating with the review and reimbursing customers the amount they should have received following poor service by the company in the past.

Ms Finn said: "The sensible approach Thames adopted in this case has been a significant factor that was taken into account when settling the level of this proposed fine. The cost of improving systems and compensating customers, along with the fine, will be borne by shareholders and will not be paid for by customers."

There was no evidence of fraud by Thames in this case, Ofwat stressed, and the regulator said that the investigation had not found any evidence of deliberate misreporting, nor had the misreporting affected the price limits set by Ofwat for the service customers' received.

The regulator said that the proposed fine was appropriate given the seriousness of the misreporting and customer service failures by Thames, while also being fair and proportionate and taking account of the steps Thames has taken to remedy the situation.

However, Thames Water had pledged to challenge the fine. Thames Water Chief Executive David Owens said that the fines were "totally disproportionate" and said: "We can see no justification for the level of the fines proposed. 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. This makes little sense."

(KMcA)


Related UK National News Stories
Click here for the latest headlines.

13 September 2013
Ofwat To Challenge Thames Water Increase Request
Water regulator Ofwat has said it will challenge Thames Water's request to increase customer bills by as much as 8% from next year. The increase could see an additional £29 added to an annual average household bill. The regulator has said it will assess Thames's application in order to determine whether the increases are justified.
04 July 2006
No leakage fine for Thames Water
Thames Water has escaped being fined by regulator Ofwat for failing to meet its targets on leakage reduction. However, Ofwat has ordered the firm to invest a further £150 million in order to reduce leaks. Thames Water had been facing the prospect of being fined £140 million. The news is likely to lead to criticism of Thames Water.
17 April 2008
Ofwat Fines Thames Water For Misreporting Information
Ofwat, the Water Services Regulation Authority, has fined Thames Water 0.7% of its turnover of £9.7 million for misreporting information and delivering poor service to customers. Ofwat is now publishing final notices penalising the company, after proposing to fine the company last September.
18 July 2014
Two Dead In M40 Crash
Thames Valley Police have confirmed the deaths of two people in a crash on the M40 in Buckinghamshire. Police have said that two cars collided on the westbound carriageway between junction 2 for Beaconsfield and junction 3 for Loudwater just after 05:00 on Friday morning.
12 August 2013
Thames Water Asks To Increase Prices
Thames Water has submitted an application to adjust its prices for the current price control period, which runs from April 2010 to March 2015. The organisation made the submission to industry regulator, Ofwat.