Tag: Thames Water

Poor consolation

It seems that Thames Water have, amongst utility companies, a unique touch when it comes to trying to reassure people after flooding. They claim to have done more for those flooded earlier this week than any other water company could, yet also admit that some of the flood-mitigation equipment fitted did not work.

The devices were not 100 per cent successful but they did lessen the amount of water in the homes.

What a great comfort that is. Regardless of whether the flooding is two inches deep or six inches deep, a floor covered by water is just as damaged.

A big drip

My first reaction, when I saw the news story about Thames Water’s invention for identifying leakage from its customers’ pipes, was that this was typical of them: putting resource into proving that the minority (25%) of leakage was not their responsibility, rather than fixing the bigger problem of their own leakage. This may well be the case, but the press-release that this story came from made me wonder why this is necessary at all. The figures in Thames Water’s press release are somewhat ambiguous, in that it is not clear whether the ‘average water loss per property’ quoted is just the 25% from customers’ pipes, or the includes that from Thames Water’s pipes too. However, whether the leakage from customers’ pipes is equivalent 95 or 24 extra toilet flushes per house per day (or 19 or 5 extra baths per house per day), that seems, to me, to be a lot of water… especially as not all properties have leaks. It’s not a small dribble that ‘can often go unnoticed as the escaping water may drain away naturally’. As the new invention only works on water meters and can’t be used on unmetered properties, I would have thought that those that would benefit most from the application of this invention would have already noticed that their water bills were rather high.

Not only are there customers apparently content to pay large water bills for their leaks, but Thames Water will also pay for their repairs for them. It clearly pays to spend money like water.

Turning water into champagne

In September Thames Water complained bitterly about the £12.5M of fines imposed on them by Ofwat, saying it would impair their ability to improve their services. Thames Water has just reported an increase in half-year profits of over £66M, with mains replacement at the highest rate ever.

Those fines have clearly been devastating.

Thames crocodile tears

The news that Thames Water Utilities is to be fined £12.5M has produced varying responses. What hasn’t been disputed (except by Thames Water) is that the company deserves a thoroughly good kicking for the abysmal service it provides. It’s the fact that the penalty is a fine that is the problem. As stated in Ofwat’s press notice and in Thames Water’s retaliation, the fine goes to the Treasury’s ‘Consolidated Fund’, not to the customers. So think of the fine as a bit of additional taxation shared between Thames Water’s customers and shareholders. It would surely be far more effective if the regulator could impose penalties in the form of forcing the company to do additional enhancements on its water system, or in the form of a cap on the dividend it could pay it’s shareholders.

In complaining about the level of the fine, Thames Water are being, to put it mildly, rather economical with the facts.

We can see no justification for the level of the fines proposed. They are totally disproportionate to any sensible measure of the harm the original GSS payment irregularities may have caused and disregard the steps we have taken to reimburse our customers…. The reporting errors for which we are being penalised took place over a 12-month period from 2005 to 2006, and represent missed payments to our customers of under £500,000.

Whilst that is true, it is apparent from Ofwat’s two notices that Thames Water was claiming, at the highest levels, that there was nothing wrong with compensation payments for missed appointments, when they knew full well that there was.

To put the penalty in perspective, it is less than 2.4% of the amount that Thames Water Utilities paid its shareholders in dividends during the last financial year. The idea that the fine might thus impair Thames Water’s ability to improve its services is, quickly frankly, risible.