All Dŵr Cymru Welsh Water customers are to get a £10 rebate after a watchdog launched an investigation into the company's leakage performance. An internal review found that leakages were higher than originally stated and that consumption per head was lower.
It showed that leaks have been running at a much higher level than previously acknowledged, and the company has allocated an additional £54m to tackle leaks over the next two years in order to reduce the level as soon as possible. Welsh Water will spend a total of £284m in this regard between 2020 and the end of 2025.
Watchdog Ofwat sets performance targets for companies on leakage with companies assessed against these targets annually. They can be penalised or rewarded, depending on their performance. You can get more story updates straight to your inbox by subscribing to our newsletters here.
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There has been a full review over the last 15 months with the help of independent experts, that found that deficiencies in governance and management oversight led to the problems that came to light, which are now said to have been resolved.
The total discharges for 2021/22 were 240.3ml/do compared to the 157.4ml/do originally stated. This is equivalent to 8.6m3 per km of mains per day, and compares to the latest data available across the industry (from companies' annual performance reports for 2021/22), which varies between 4.5 m3/km/day (Anglian) and 18.7 m3/km/d (Thames Water).
Peter Perry, the company's CEO, said: “We are very sorry and disappointed that this has happened. We will invest an additional £54m over the next two years to detect and reduce leaks as quickly as possible, and we have shared the findings of our investigations with our regulator.
"Although it was our robust assurance process that detected the problem, there were flaws in our governance and management oversight processes that allowed this to happen in the first place. We have made the necessary changes to our leak reporting methods, and closed the gaps in our reporting and governance processes."
Ofwat confirmed today that it was reviewing the information provided to it before deciding whether further action was necessary. It said no further comment would be made on the matter until Ofwat had completed its investigation.
David Black, Ofwat CEO, said: "We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers. We recognise that Welsh Water came to us when it became aware of the issue with the accuracy of its performance data.
“Ofwat's investigation will consider Welsh Water's restated performance figures, the circumstances that led to the company reporting inaccurate performance, and what steps it has taken or is taking to address these failings.”
Emma Clancy, Chief Executive of the Consumer Council for Water (CCW), said: “We recognise Welsh Water has moved swiftly to admit its mistake and the £10 rebate will go some way to reassuring its customers that it regrets the damage this will have caused to people’s trust in it.
"It is reassuring that the company identified the issue through its own assurance processes. Customers will want the company to take the right steps to ensure this doesn’t happen again. Our research shows leakage from water companies affects customers’ own motivation to save water so Welsh Water will need to build trust on this issue.”
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