WATER COMPANIES PLAN PRICE INCREASE

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For 16 years Anglian Water board officials insisted a stream pouring down a lane was a natural spring, until farmer John Berry turned it off at a stopcock. John said, “I turned the tap off with my hand and half an hour later the water had disappeared, leaving just a mud hole. As soon as I turned it back on, the pond filled up. If that is a natural spring then it must be the only one with a tap on it.”

The leak at Hamerton, Cambs, left the roadway like an ice rink in winter when it froze. Locals called Anglian Water when it appeared and demanded action. Officials ran tests and said it was fresh spring water. Anglian Water finally admitted there IS a leak yet a spokeswoman still insisted, “The leaks in the past were spring water, but the spring water seems to have gone and this is a proper leak. It’s just a coincidence. The present leak is not spring water.” (Source: The Sun, May/06)

Thames Water said it was considering bringing in emergency drought orders in the South East and will switch off its supply to thousands of homes if the severe drought continues. It would mean supplies to homes being cut off during certain parts of the day to conserve water leaving householders to collect rationed water from tankers in the street and standpipes would be set up to restrict supply.

Thames Water loses 915million litres of water every day from leaks, almost a third of what it supplies which is enough to fill 366 Olympic size swimming pools. The company is the worst in the industry for waste and hasn't hit its target to cut leaks for the past three years. In recent years it has drained seven reservoirs, six filled in for homes. Pre-tax profits to March 2005 rose 6% to £285.5million. Retiring chairman Bill Alexander pocketed nearly £800,000 while other directors' bonuses rose from £228,000 to £615,000. (Source: Daily Mirror, Mar/06)

Water bills in England and Wales will rise by 11.8%, or £29, for the year beginning 2005-06. The 11.8% figure is higher than the 8.5% which Ofwat said back in 2004 would be the final price rise limit for the forthcoming year. It explained that the new figure took into account inflation, which was not previously included and that the rise was necessary to reflect the water firms' higher costs. It added that the additional revenues would also enable the water companies to make further improvements to drinking water quality and the environment sought by the government.

"I realise that all bill increases are unwelcome," said Ofwat boss Philip Fletcher, director general of water services. "But I can assure customers that bills are going up by no more than is necessary to enable water companies to continue to provide the high-quality water and sewerage services that customers require." Despite the increases for 2005-06, Ofwat said that many households' water and sewage bills will still be lower in real terms than they were in 1999, before Ofwat introduced a 12% reduction in bills from April 2000.

Severn Trent has confessed it has given industry regulator Ofwat more false information. The company says it had misreported statistics about the way it handles complaints from customers and enquiries about bills. Severn Trent said it did not know how much money was at stake but admitted the problems seemed to stretch back several years. "We are determined to resolve any issues uncovered as soon as possible," said chief executive Colin Matthews. "We shall continue to work in full and open co-operation with Ofwat and obviously if customers have been disadvantaged then we shall reimburse them." (Source: BBC News, Apr/06)

Complaints about Severn Trent have risen by more than 50% in six months. The Consumer Council for Water has published its annual review, revealing that complaints about the company have increased from 754 to 1,164. People contacting the consumer council were reporting a variety of problems, ranging from billing to delays in connections to the mains. Tuch Aujla, who own Friars Bar and Steakhouse in Derby, is one victim of the billing problems that Severn Trent has had. The company threatened to cut off his water if he did not pay an outstanding bill of more than £4,000, before it discovered that it in fact owed him more than £5,000. (Source: Derby Evening Telegraph, Jul/06)

Householders responsible for almost £1 billion in unpaid water bills face compulsory rationing under measures being considered by the Government. Up to 15% of people refuse to pay and have pushed up bills for everyone else by £10 a year. A Parliamentary report includes in its recommendations a demand to introduce rationing for non-payers that could limit them to as little as two litres a day. The level of non-payment was described as “astonishing” in the report on water management by the House of Lords Select Committee on Science and Technology. Members were shocked to learn that so many householders abuse the right of supply in the Water Industry Act 1999 that banned disconnections. An Australian firm has designed a tamper-proof device that restricts the flow so that only enough for minimum health and safety needs is supplied. (Source: Times Online, Jun/06)

Severn Trent Water has been fined a record £35.8 million for deliberately providing false data to industry regulator Ofwat and providing poor customer service. The proposed penalty is for misreporting customer service data during 2005 and earlier years, as well as "substandard" service. The regulator said the company's shareholders would bear the entire cost of the proposed penalty and that it cannot be passed onto its customers. Severn's actions resulted in customers paying higher bills than they should have done. ST said it was lowering bills by £2.40 per household to ensure it had not profited from the episode.

It is the largest fine by value, but not in percentage of turnover, levied by Ofwat. Earlier this year Southern Water was fined 3.6% of turnover, or £20.3 million, for similar offences. The latest matters relate to a period before the appointment of the current management team. Severn Trent has 3.7 million household and business customers in England and Wales. In a separate case of misreported data, Severn Trent said it would plead guilty to two offences relating to leakage figures supplied to Ofwat in 2001 and 2002. The pleas are due to be entered at City of London Magistrates' Court.

Concerning the customer service data failings, the regulator said Severn had deliberately misrepresented its performance on measures such as the number of customers who had received no replies to complaints, and those who had received late responses to bills. The company's behaviour was "unacceptable" and had amounted to "deception", Ofwat said. (Source: Daily Express, Apr/08)

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