TROUBLED THAMES WATER HIT WITH ANOTHER HUGE FINE BY REGULATOR AS PROFITS TUMBLE
Thames Water has been hit with its second big fine this year for failing to reduce leakage. Industry regulator Ofwat has fined the company the maximum £8.55m it can levy and said it may take further action.
In March, the water firm was ordered to pay a record £20m for polluting the river Thames with 1.9bn litres of raw sewage.
Ofwat chief executive Cathryn Ross said Thames’s failure to meet its leakage commitments was “unacceptable”.
Thames Water said that it had outperformed its target for the past 10 years and reduced leakage by 100m litres a day over the period.
“We regrettably missed our 2016/17 leakage reduction target by 47m litres per day, which represents 1.8% of our average daily production,” it said.
Ofwat said it has opened an investigation to consider whether to take enforcement action in addition to the £8.55m fine.
Thames Water said in its annual results on Wednesday that the company had “transformed” its approach to preventing pollution following six offences at six sites in the Thames Valley between 2012 and 2014. The release of untreated effluent made people ill and killed thousands of fish.
The water firm said that it caused 315 pollution incidents in 2016 – higher than last year, but below its target of 340 incidents.
Full-year pre-tax profit tumbled 86%, from £511.2m to £71.1m, which Thames blamed on a loss associated with complex financial products, increased costs and lower property sales.
Chief executive Steve Robertson, who joined in September 2016, said despite the challenges faced during the year, the underlying performance was sound.
Thames Water’s annual report revealed that he was paid a £54,000 annual bonus despite the gloomy results.
The company said the potential bonus was trimmed because of its poor performance.
Mr Robertson’s total pay was £460,000, including the bonus and a pro-rated £550,000 annual salary after taking on the top job in September last year.
Australian group Macquarie sold its remaining 26% stake in Thames Water earlier this year to the Canadian pension fund investor Borealis Infrastructure and the infrastructure investing arm of the Kuwait Investment Authority.