Welsh Water to pay £40 million following Ofwat investigation.

Following an inquiry by Ofwat, Welsh Water has been found to have provided inaccurate information to customers and regulators regarding its performance on leakage and per capita consumption (PCC) data. Consequently, the company is required to pay £40 million to compensate its customers.

Upon discovering discrepancies in its reporting due to Ofwat’s data assurance regulations, Welsh Water promptly informed Ofwat. Subsequent investigations by Ofwat revealed substantial governance and management oversights within the company, resulting in the misrepresentation of leakage and PCC performance metrics over a five-year period, significantly downplaying its actual performance shortcomings.

As part of the proposed enforcement measures, Welsh Water is mandated to allocate £39.4 million for customer redress to rectify its shortcomings. Out of this amount, Welsh Water has already earmarked £15 million for customer compensation, with an additional £9.4 million to be allocated subsequently, leading to reduced bills for customers. The remaining £15 million in costs will be absorbed by Welsh Water rather than being passed on to customers.

In addition to compensating customers, Welsh Water must address its subpar performance on leakage and PCC by committing to invest an extra £59 million during the current 2020-25 price review period.

David Black, CEO at Ofwat said:

“We need to invest tens of billions of pounds over the next 30 years to reduce pollution and ensure that our water infrastructure can grow with our population and adapt for climate change. Customers and investors will only agree to fund this if they trust water companies to provide accurate information about their performance.

“For five years, Welsh Water misled customers and regulators on its record of tackling leakage and saving water. It is simply indefensible and that is why we are making Welsh Water pay this £40m to benefit its customers.

“Today’s announcement puts the industry on notice that we have the resources and will act when companies fail to meet their obligations to customers.”

Ofwat has bolstered its enforcement capabilities to uphold industry standards, hold companies accountable for their performance, and enhance customer and investor confidence in the transparent and responsible operation of water companies.

Source :Ofwat

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