The Consumer Council for Water today (Thursday 5 June) called for customers to share in the success of Thames Water’s 34% increase in profits.
Thames Water announced extremely good operational and financial results for 2007-08. The company is now more efficient leading to a reduction in operating costs. This has in turn led to an increase in operating profits to £590.1m from £439.1m. But with profits of this scale customers are bound to expect a share in this success.
The Consumer Council for Water has been urging all the water companies to consider consumers in their profit announcement and provide them with real benefits, either by fixing price increases to inflation levels or less, or providing extra investment in pipes, sewers and treatment works, or to provide direct assistance to their vulnerable customers. It is essential that the success a company enjoys is shared with customers as well as shareholders.
Thames Water has indicated that they have taken this on board and will be announcing a major customer and community initiative in due course.
David Bland, Chair of the Consumer Council for Water London and South East, said: “Profits are vital for improvements to pipes, sewers and treatment works, and to “ensure the safe and reliable supply of water and sewerage services that consumers value highly. Under its current management Thames has greatly accelerated the pipe replacement programme – to minimize leaks – and has had up to 500 excavations at one time in London. The company is also investing heavily in customer service capability, and their total investment is now running at £1 billion a year.
“However, we know that the industry did very well from the 2004 price review, as there was a rapid rise in the value of companies and that, for the first time since privatisation, no water companies appealed against the price limits set by Ofwat.
“We are eagerly awaiting the details of how the company plans to deliver the added value to its consumers and not just shareholders.
“Looking forward to the next water price review, which will be decided in 2009, we are pressing the water industry to place consumers at the heart of the whole process. In particular Ofwat should listen to consumers, take note of what they are saying, and set prices and service improvements to reflect what consumers want and will find acceptable.”
Thames Water announced profits of £590.1 million for 2007/8, an increase of 34.4% for the previous year.