'Boil water' notices were sent to 70,000 homes
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The watchdog body for water customers in Wales says there must be action to restore public confidence in drinking supplies.
It follows the outbreak of the cyrptosporidium bug in November 2005 which led to 231 people across Gwynedd and Anglesey falling ill.
On Tuesday, Dwr Cymru was criticised by the Drinking Water Inspectorate for not responding fast enough to the outbreak.
The Consumer Council for Water said the company must now address shortcomings.
Welsh Water has already been fined £60,000 for the outbreak, which focused on the Llyn Cwellyn reservoir at Rhyd-ddu in Snowdonia.
Health officials were confident the reservoir was the most likely candidate for the infection that affected 70,000 homes, although tests at the lake always proved negative.
In its report, the Drinking Water Inspectorate found that Welsh Water did not grasp advice issued in 1998 to all water utilities by an expert group on cryptosporidium.
It also criticised the company's monitoring procedures in place at the reservoir at the time.
Dwr Cymru has now installed extra treatment equipment at the Llyn Cwellyn reservoir.
Responding to the DWI findings, the Consumer Council for Water Wales said the criticisms and recommendations in the assessment must be addressed "urgently".
"Our job as the consumer champion is to challenge the water company on behalf of customers throughout Wales to deliver the safe quality drinking water that they expect and deserve," said the chair of the body, Diane McCrea.
"This assessment raises serious criticisms of the company's procedures which will inevitably raise concerns for customers who ought to be able to have complete confidence in the safety of their drinking water."
Urgent meeting
A spokesman for Dwr Cymru said it was considering the contents of the inspectors' report, and would be responding in the future.
Last month Dwr Cymru was fined £60,000 and ordered to pay £69,000 in costs after pleading guilty at Caernarfon magistrates to supplying water unfit for human consumption.
The company accepted it should have started monitoring for the stomach bug much sooner than it did, the court was told.
The Consumer Council for Water Wales said it was seeking a meeting with Welsh Water as a "matter of urgency".
"Customers need to be assured that the problems have been resolved and that effective procedures are put in place to reduce the risk of any future incidents. The safety of drinking water should not be compromised," added Ms McCrea.
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