Ok, so this headline: Water Company Escapes Fine For Leaks sems pretty straighforward, but when you consider this headline Thames Water to pay £150 mln over leaks from earlier today, things get a bit confusing.
What it boils down to is that Thames Water has escaped being fined by Ofwat but they have 'agreed' to spend an extra 150 million pounds on repairing leaks.
Ofwat have issued a statement saying:
"Thames has bound itself to spend an extra 150 million pounds at the cost of its own shareholders to replace more ageing pipes than planned. This will directly address the issue of London leakage and achieve more secure supplies."
Ofwat could have fined the company "a maximum of up to 10 percent of its water services turnover, equivalent to roughly 66 million pounds." but decided that a 'gesture' wasn't what was needed and commiting TW to a legally binding commitment would be a better solution.
On the face of it, it sounds like a decent solution, especially as we have no idea what the fine would have been spent on anyway. But there's still a lot of work to be done, Thames reported profits of £346m last year, up one third, and of course they keep on hiking up those bills.
And then of course there's the drought order, Thames Water has applied to Defra for one and expects to hear in August whether or not it has been granted.
