Page last updated at 14:01 GMT, Thursday, 17 April 2008 15:01 UK

Ofwat cuts fine for Thames Water

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Thames Water has 13 million customers

Ofwat has cut the fine it is imposing on Thames Water, saying that while the firm provided false information it did not do so deliberately.

The water regulator will now fine Thames Water 9.7m, compared with the initial 12.5m it proposed last year.

Thames Water will have to pay 8.3m for poor information, down from 11.1m, but its penalty for poor customer service will remain at 1.4m.

The firm said it was pleased Ofwat had agreed it had not acted intentionally.

'Welcome the reduction'

"We are pleased that Ofwat have accepted our representations on the level of the fine," said Thames Water chief executive David Owens.

Thames Water's systems and processes were inadequate and customers lost out
Ofwat chief executive Regina Finn

"This is still a high figure considering that the failures were unintentional... but we welcome the reduction."

He added that the errors, which happened across 12 months in 2005 and 2006, took place under previous management.

Thames Water was bought at the end of 2006 by a consortium led by Australian investment fund Macquarie.

Its overall fine equates to 0.7% of its annual turnover, well below the maximum possible penalty of 10%.

"Thames Water's systems and processes were inadequate and customers lost out," said Ofwat chief executive Regina Finn.

"The penalty reflects the importance we attach to reliable, accurate and complete information and gives a clear signal to both the company and the water sector that non-compliance is not a cheap or easy option."

'Disappointed'

Thames Water has 13 million customers across London and the south east of England.

The Consumer Council for Water consumer group said it was surprised about the reduction and disappointed that the fine would go to the Treasury.

"Penalties can and should directly benefit consumers, and make it very clear to companies that breaking the rules will not be tolerated," said the group's chairwoman Dame Yve Buckland.

"Where penalties occur, consumers should benefit first. They should not be just another source of income for the Treasury."

Earlier this month, Ofwat said it proposed to fine Severn Trent Water 35.8m - 2.9% of its turnover - for providing false information deliberately and offering the company's customers a poor service.


SEE ALSO
Severn Trent faces a 35.8m fine
08 Apr 08 |  Business
Southern Water accepts 20m fine
08 Feb 08 |  Business
Thames Water to be sold for 8bn
16 Oct 06 |  Business
Ofwat to fine Thames Water 12m
28 Sep 07 |  Business

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