Thames Water blames 'unpaid bills' for profit fall

The UK's biggest water company has blamed the unpaid bills of customers hit by the recession for the company's fall in half-year profits.

Thames Water said debts were expected to reach £70m by the end of the year.

It was also hit by lower water consumption during the wet summer and an earlier hosepipe ban, a spokesman said.

Thames Water serves London, Berkshire, Buckinghamshire, Gloucestershire, Kent, Oxfordshire, Surrey and Wiltshire.

The company has 14 million customers.

Tap water quality

The cost of the £4.1bn Thames Tideway Tunnel aimed at preventing pollution of the River Thames is expected to put further pressure on household water bills.

Thames Water customers were warned in October that bills were likely to rise by as much as £80 a year to help pay for the so-called "super-sewer".

The company also said costs had risen because of higher energy prices and inflation.

Chief executive Martin Baggs said the company had spent £17bn on its infrastructure since it was privatised in 1989.

He said: "As a direct result of this investment, the quality of our customers' tap water and the environmental compliance of our 350 sewage works are better than they've ever been, and leakage from our 20,000 mile network of water mains remains close to its lowest-ever level.

"This transformation would never have been possible under public ownership."