08/02/2008

Southern Water Fined £20.3 Million

Southern Water has been fined £20.3 million by industry regulator Ofwat for deliberately misreporting information and delivering poor service to customers.

Ofwat announced that Southern Water would receive the fine in November and confirmed it on Friday, following a 28-day consultation period.

The company's shareholders will bear the entire cost of the fine and it will not be passed on to the firm's customers.

Ofwat Chief Executive Regina Finn said: "Southern Water behaved unacceptable in deliberately misreporting customer service performance to Ofwat and systemically manipulating information to conceal its true performance over an extended period of time and the company has acknowledged this.

"The obligations on the companies to provide accurate and reliable data are designed to protect consumers in a monopoly environment. Without a choice of supplier, this protection is essential.

"We expect companies to comply with their obligations and this fine sends a clear message that non-compliance is not a cheap or easy option."

Southern Water issued a statement which said: "Southern Water is confident today's announcement will conclude the issue which resulted in a two-year investigation initiated by its new management team on discovery of the irregularities in October 2005.

"This came about during a project to install a new billing system - ironically to improve customer service - and showed that figures reported to Ofwat, relating to response times to customers contacting the company's customer service centre, did not always match performance."

Les Dawson, Southern Water Chief Executive, said: "Today's announcement draws a line under a shameful period in the company's history when an area of the business was deceiving our customers and the regulator. The new management team has put procedures into place to ensure this will never happen again and once again we apologise to our customers.

"I can also assure them that the fine will be borne by the company's current shareholders even though neither they, nor our previous owners, knew of the deception that took place before the company's present management team was appointed."

Southern Water also said that it had agreed to reduce future customer bills, which had been higher than they should have been as a result of the misreporting.

(KMcA)


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

07 March 2006
Customers to receive refund from Severn Trent Water
Customers of Severn Trent Water are to receive refunds after an investigation by Ofwat found the water company had overcharged customers. The regulator's investigation found that the water company, which has more than eight million customers, had provided regulatory data that was either "deliberately miscalculated" or "poorly supported".
01 March 2006
Water firm to introduce meters
A water company in the south east of England has been given permission to install compulsory water meters in homes. Folkestone and Dover Water Services was granted "water scarcity status", which will allow it to force all 65,000 homes in its service area to install meters.
21 June 2006
Thames Water misses target on reducing leaks
Thames Water has missed its target for reducing leaks for the third consecutive year, it has been revealed. The water firm had a target, set by water regulator Ofwat, of losing no more than 860 million litres of water per day. However, the company missed its target by 34 m l/d. However, Thames Water also announced a 31% rise in profits to £346.
09 January 2014
Burst Water Main Causes Chaos
A burst water main has caused considerable flooding in Glasgow. A statement from Scottish Water said: "An issue with a faulty valve which regulates pressure has resulted in burst water mains in Mount Stuart Street, Shawlands; Cowcaddens and Duke St at the junction of East Wellington Street and Shettleston Road.
07 November 2003
Water price rise proposals 'unacceptable for customers'
WaterVoice has today described companies' proposals for billing as "unacceptable to customers in their current form", and called on water companies, regulators and the government to "think about customers' priorities" in terms of value for money.