South West Water to pay £24m to avoid fine from Ofwat over leaks
South West Water is to invest £24m into its network and local environment to avoid being fined by the industry regulator after a failure to manage its wastewater network led to unnecessary leaks.
Ofwat said the utility had “failed to build” and operate its wastewater treatment works and sewer network to “ensure they performed sufficiently.”
The watchdog noted a lack of “adequate oversight” from the company’s senior management team and board to ensure it met legal obligations.
South West Water, which serves around 1.8m customers across Cornwall, Devon and parts of Dorset and Somerset, is the latest to face a scolding from Ofwat this year amid an industry-wide crackdown on leaks and dividend payouts.
Thames Water, the UK’s biggest water supplier, was given a historic £123m fine in May after a series of failures.
Ofwat said it had opened up a consultation to the public and key stakeholder prior to making a final decision on South West Water.
South West Water latest utility under fire
“Water companies should be in no doubt that they will be held to account if they fail to meet their legal obligations to customers and the environment,” Lynn Parker, senior director for enforcement at Ofwat, said.
“Our investigation found a range of failures in how South West Water has gone about managing its wastewater business.
“We will continue to monitor the company to ensure that this work is carried out as quickly as possible so that customer confidence can begin to be restored.”
South West Water’s enforcement package includes £20m of investment over the next five years to reduce spills from storm overflows.
The remaining £4m will be split into two tranches, with one half going into a local fund to tackle “sewer misuse and misconnections,” and the other into a Nature Recovery Fund for the local environment.
The Exeter-based utility has taken some steps to address compliance issues already, according to Ofwat. These include investment in some of its treatment works and storm overflows, and the introduction of “new governance arrangements” to ensure better oversight of its operations.