The London Assembly is concerned that any fine imposed by Ofwat on the country’s largest water company Thames Water could be swallowed up by the Treasury rather than given back to customers.
Theoretically Thames Water could be fined £140 million which is about 10% of its turnover, but it’s more probable Ofwat will set a smaller fine of about £10 million. Does anyone know the reasoning behind this? I’d love to know why they don’t just fine them the full amount they’re allowed to.
Another interesting point in this story is that a team of outside consultants who are helping Ofwat fix the level of the fine also work for Thames Water. Split loyalties maybe?
The biggest beef the Assembly has about all this is the fact that Thames Water are making huge profits for their shareholders whilst failing miserably to plug the 200 million gallons a day lost through leaks.
So to summarise:
- Thames Water are making massive profits
- Thames Water are losing massive amounts of water
- Ofwat could fine them £140 million but will probably fine them £10 million
- Ofwat are working with Halcrow to set this fine level – Halcrow also work for Thames Water
- Any fine imposed will go to the Government rather than the customer