Ofwat fines Thames Water nearly £123m after two investigations into the company
The water company's been fined the largest penalty Ofwat has ever issued.
Ofwat has fined Thames Water nearly £123m following two investigations into the company.
The water regulator has announced their final decision after two investigations looking into the operations of Thames Water.
The water company- who serve water to parts of Gloucestershire, Oxfordshire, London, Berkshire, Wiltshire, Surrey, and Buckinghamshire, and wastewater to parts of Bedfordshire, Hertfordshire, West Sussex, Kent, and Essex- will face penalties totalling £122.7m.
The fine will be paid by the company and its investors, not by customers.
Breakdown of the penalties:
- £104.5m penalty - breaches of rules relating to its wastewater operations, the largest penalty Ofwat has ever issued.
- £18.2m penalty - breaches of rules relating to dividend payments.
- Enforcement order - requires Thames Water to rectify identified breaches relating to its wastewater operations.
'Caused unacceptable impact on the environment and customers'
In its biggest and most complex investigation, Ofwat has been looking into all wastewater companies' operation, management and maintenance of their sewage treatment works and sewerage networks.
As part of that investigation, in August 2024, Ofwat consulted on a proposal to impose a £104.5m penalty on Thames Water, alongside an enforcement order which would require the company to take steps to ensure its compliance.
On Wednesday (28th May), Ofwat finalised both the penalty and enforcement order which have now been imposed on the company.
Ofwat's investigation into how the company was managing its treatment works and wider wastewater network uncovered failings that have amounted to a significant breach of the company's legal obligations, which, they say, "has caused an unacceptable impact on the environment and customers."
David Black, Chief Executive at Ofwat, said: "This is a clear-cut case where Thames Water has let down its customers and failed to protect the environment.
"Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.
"The company also failed to come up with an acceptable redress package that would have benefited the environment, so we have imposed a significant financial penalty.
"This decision provides certainty for the company for both its past failures and what we expect from the company to comply with its obligations in future.
"The company is seeking new buyers to fund its turnaround to provide better services for customers and the environment by improving operational performance and financial resilience.
"This provides a clear opportunity to break with the past, Thames Water will now need to correct the issues our investigation has identified."
Environment Secretary, Steve Reed said: "The Government has launched the toughest crackdown on water companies in history.
"Last week we announced a record 81 criminal investigations have been launched into water companies.
"Today Ofwat announce the largest fine ever handed to a water company in history.
"The era of profiting from failure is over.
"The Government is cleaning up our rivers, lakes and seas for good."
Ofwat has also confirmed its decision to impose a £18.2m penalty on Thames Water as a result of a separate investigation which found that the company had broken the rules relating to the payment of dividends.
This is the first time Ofwat has used its powers to take enforcement action against a water company where their decision to make dividend payments does not properly reflect the company's delivery performance for customers and the environment.
Mr Black said: "We are clear that dividends must be linked to performance for customers and the environment.
"We will not stand by when companies pay undeserved dividends to their shareholders.
"This is the first time we have used these new powers, and this sets the standard.
"We will protect customers from water companies that seek to take money out of their businesses, where their performance does not merit it."