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Last Updated: Monday, 3 July 2006, 21:34 GMT 22:34 UK
Thames Water facing leak penalty
Spouting water
Thames Water is encouraging customers to save water
Thames Water is due to find out what penalties it faces for failing to meet its annual leak reduction targets.

The firm has been widely criticised for not doing enough to cut leaks despite applying for a drought order and unveiling a 31% jump in annual profits.

Water industry regulator Ofwat may decide to fine Thames up to 140m for failing to prevent 894 million litres of water escaping per day.

The company insists it is doing all it can to tackle the leakage problem.

'Unacceptable'

However, it has applied for the drought order from the Department for Environment, Food and Rural Affairs (Defra).

THAMES WATER LEAKAGE MEGALITRES per DAY
2000-01: 688
2001-02: 865
2002-03: 943
2003-04: 946
2004-05: 915
2005-06: 894
Source: Ofwat

It expects to hear in August whether Defra has granted its request.

Yet Thames Water has now missed its target for reducing leakages for the third year in succession.

Although it has reduced the volume of water being lost, Ofwat, which is to make its announcement on Tuesday morning, has already called its performance "unacceptable".

Owned by German utility group RWE, Thames Water made pre-tax profits of 346.5m during its last financial year.

"It is immensely frustrating that despite our strenuous efforts to reduce leakage we have missed our target," said Thames Water's chief executive Jeremy Pelczer last month.

"We remain committed to achieving our target over the full five-year regulatory period."


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