Corp-Ethics.com - Report: Ofwat to fine Thames Water £12m

Company	Thames Water [Company Info]
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Date	Issue	Title
28th Sep 2007	Other Issue	Ofwat to fine Thames Water £12m

Report

Thames Water is facing a fine of more than £12m for "inadequate" reporting and customer service.

Water watchdog Ofwat said it planned to fine Thames £11.1m for failing to provide "robust information".

A further £1.4m penalty is being imposed as its processes and systems meant users received poor service and missed payments they were entitled to.

Thames has pledged to challenge the fine saying it will divert money from repairs, meaning customers lose out.

"What particularly concerns us is this large sum of money could be spent directly on improving services to customers, but the only benefit will be to the Treasury. This makes little sense," said Thames Water chief executive David Owens.

The company now has four weeks to challenge Ofwat's decision.

The proposed penalty follows a 2006 probe by Ofwat into the utility's reporting of its customer service performance.

Thames itself had alerted Ofwat to the problems and said the missed customer payments amounted to less than £500,000, and that it had taken steps to resolve the problem.

Independent assessments found that the errors had been unintentional and took place under the previous management regime at the company, it added.

As a result the regulator should reconsider the fines, the utility argued.

However, Ofwat said it believed the fines were "appropriate" given the seriousness of the problems at the firm and the steps it took to rectify the problem.

But the regulator did add that there was no evidence of fraud or deliberate misreporting by Thames.

"Water is a monopoly business and until we see a competitive market developing Ofwat must protect customers by regulating the companies' prices and quality of service," said Ofwat chief executive Regina Finn.

"To do this we need complete, accurate and reliable information. Misreporting of information damages our ability to regulate the industry and therefore to protect customers."

The decision means Thames is the latest water company to be reprimanded for its practices.

Since March last year, Ofwat has also warned Southern Water and Severn Trent they could face fines for failing to meet customer standards.

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