Water Company Faces Multi-Million Pound Penalty

Introduction to the Penalty

Wessex Water has become the latest energy supplier to face a multi-million pound penalty package over sewage leaks, the industry regulator has announced. The company, which has 2.9 million customers in the south west, should pay £11 million more to upgrade its wastewater infrastructure instead of a fine.

Reason for the Penalty

The regulator said Wessex had failed to operate, maintain and modernize its network to ensure it could cope with waste streams, including wastewater. It ruled that Wessex, owned by Malaysia-based YTL, could not finance the additional investment required through company accounts. The money should be spent on a number of specific projects.

Wider Wastewater Investigation

Ofwat said Wessex was the sixth case the company has completed as part of its wider wastewater investigation, which has resulted in fines and enforcement packages worth £250 million. Almost half of that sum is in the account of Thames Water, the country’s largest water operator, which is cash-strapped and is currently seeking approval for a change of ownership to avoid collapse.

Response from the Regulator and the Company

Lynn Parker, senior director of enforcement at Ofwat, said: “These cases are crucial to holding water companies to account and driving the transformation of the water sector desired by the public.” Wessex Water said it regretted the impact of its wastewater performance “on customers and the environment.” The company said the investment package will “address the problem head-on” and it plans to invest £300 million in its wastewater infrastructure by 2030.