WATER SERVICES
REGULATION AUTHORITY News Release (PN 27/07) issued by The
Government News Network on 9 August 2007
Only Severn Trent
Water fails its leakage target
Water companies in England and Wales reduced the amount of water
lost to leakage by nearly 160 million litres of water (Ml/d) a
day. This is equal to the daily needs of around one million
domestic consumers.
Figures released by Ofwat today reveal that for 2006-07 overall
leakage fell:
* from 3,575 Ml/d in 2005-06 to 3,420 Ml/d; and
* by 65 million litres a day more than the industry target of
3,485 Ml/d.
Ofwat Chief Executive Regina Finn said:
"Reducing leakage is one very important way to ensure that
we use water efficiently. By beating its leakage target for the
year ending March 2007, the water industry has demonstrated that
it can respond to customer needs driven by issues like water
shortages and drought. We expect the industry to continue to
respond to these challenges and continue to hit their regulatory targets."
Only one water company did not meet or exceed its target. Severn
Trent Water's target was to reduce leakage by 17 Ml/d.
Leakage did fall by 9 Ml/d, but the company missed its leakage
target by 8 Ml/d.
Ofwat has secured a legally binding undertaking from Severn Trent
Water that binds the company to achieving its leakage reduction
targets for the next three years and improving its ability to
deliver its planned level of water service to consumers. The
company has underpinned this with a commitment to spend an extra
£45 million at the expense of its shareholders.
Severn Trent Water has also agreed to reduce charges to its
customers in 2008-09 by around £12 million.
Ms Finn said:
"Despite favourable conditions, in particular a very mild
winter, Severn Trent Water failed to meet its leakage target. This
is unacceptable. The company will now have to make huge efforts to
put this right. The money it needs to spend to do this will not
come from customers. Should Severn Trent Water not live up to this
commitment, enforcement action will follow, including fines if necessary.
"We recognise that Severn Trent Water faces other more
immediate priorities in dealing with the aftermath of recent
floods, but it must not lose sight of the work that it needs to
carry out to control leakage."
Thames Water, which previously failed its leakage target, has
this year exceeded its leakage target by 20 Ml/d. The company
reduced leakage to 790 Ml/d. The company is bound by a legal
undertaking given to Ofwat to continue achieving demanding future
leakage targets, with the target for 2010 set at 690 Ml/d. To do
this Thames must replace an extra 368km of ageing pipes that will
cost its shareholders around £150m. This extra investment is
equivalent to more than £40 for each consumer supplied with water
services by the company.
Ms Finn said:
"Thames Water's success is good news for its customers.
It shows that Ofwat's approach of focussing the company on
fixing the problem at its own expense delivers the best outcome.
But the company cannot afford to be complacent. There is still a
lot more work that needs to be done, and, as with Severn Trent
Water, failure to live up to their commitments will lead to swift
enforcement action."
Notes to Editors:
1. The Water Services Regulation Authority (Ofwat) is the
economic regulator of water and sewerage companies in England and
Wales. It exercises its powers in a way that it judges will allow
companies to carry out their functions properly, and finance them.
Its duties include protecting the interests of consumers, wherever
appropriate by promoting effective competition.
2. Ml/d = Megalitres per day. A megalitre equals one million litres.
3. The leakage targets for Thames Water for the remainder of the
2005-10 price review period are: 2007-08 - 755 Ml/d; 2008-09 - 715
Ml/d; 2009-10 - 690 Ml/d.
4. These targets form part of the legal undertaking given by
Thames Water last year, which will see the company replace at
least 368km of extra mains, in addition to the 1,235km which it is
already in the process of replacing in London, between 2005-10.
5. At its peak in 1994-95 overall leakage was 5,110 Ml/d. By
2009-10 overall leakage is expected to have fallen to 3,300 Ml/d.
6. A table of leakage data for 2006-07 by individual water
company is attached.
Leakage data table for 2007
Total leakage in megalitres per day (Ml/d)1,2
Water and sewerage 2006-07 2006-07 2009-10target
companies actual target
Anglian 200 215 210
Dwr Cymru 210 210 195
Northumbrian-North East 145 155 150
Northumbrian-Essex & 68 68 66 Suffolk
Severn Trent 525 (-17)3 500
South West 83 84 84
Southern 82 92 92
Thames 790 810 690
United Utilities 470 470 465
Wessex 72 74 74
Yorkshire 295 295 295
Water only companies 2006-07 2006-07 2009-10 target
actual target
Bournemouth & W 22 22 22 Hampshire
Bristol 54 54 54
Cambridge 13.4 14.0 14.0
Dee Valley 10.6 10.7 10.2
Folkestone & Dover 7.8 8.3 8.0
Mid Kent 27 28 27
Portsmouth 29 30 30
South East 69 69 69
South Staffordshire 73 75 75
Sutton & East Surrey 24 25 25
Tendring Hundred 5.1 5.1 5.1
Three Valleys 145 145 140
Industry total 3420 3485 3300
1 1 megalitre = 1,000m 3 = 1,000,000 litres
2 Numbers may not add up due to rounding. With regards to
rounding, the following rules have been followed: Performance and
targets less than 20 Ml/d are given to one decimal place; less
than 100 Ml/d are given to 0 places; and greater than 100 Ml/d are
rounded to the nearest 5 Ml/d.
3 Severn Trent's reported performance is influenced by
improvements to the way it measures leakage. The 2006-07 figures
for actual performance and the target are not directly comparable.
For 2006-07 we required the company to make a real reduction in
leakage of 17Ml/d. It has reduced leakage by 9Ml/d, but it has
failed this target by 8Ml/d. By 2009-10 Severn Trent is required
to have made a further real reduction of 25Ml/d.
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