Welsh Water pays £40m after 'indefensible' mistakes
- Published
The role of Welsh Water goes beyond keeping taps turned on - it also owns reservoirs across the nation
Welsh Water has been accused of making "indefensible" mistakes in its reporting of leakages and water use by the industry's regulator.
As a result, Ofwat said the company would have to pay £40m "to benefit its customers".
This includes a £10 rebate on every customer's bill - which has already been announced.
Welsh Water said the actual penalty handed to it by the regulator was a "nominal" £1.
The company has apologised for issues it said it had identified itself and referred on to the regulator.
Ofwat began investigating in May 2023 after an internal review by Welsh Water found "governance and management oversight failures" in data reporting.
Water leaks were found to be at a "much higher level" and usage per customer was lower than had been reported.
The watchdog sets yearly performance targets for water companies on leakage and per capita consumption.
Ofwat said its investigation found evidence the company had misreported its figures over a period of five years, "significantly underplaying its poor performance".
David Black, Ofwat's chief executive, said the company had "misled customers and regulators on its record of tackling leakage and saving water".
Keeping water supplied to people's homes and businesses is a massive undertaking
"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," he said.
"Customers and investors will only agree to fund this if they trust water companies to provide accurate information about their performance."
As part of the proposed enforcement package, Ofwat said Welsh Water would pay £39.4m to compensate for its failures.
This had already been announced by the company and included a £10 rebate, paid to its 1.4 million customers last year.
To address "poor performance" on leakage and water use per customer targets, the company will also invest an extra £59m before 2025 on upgrading infrastructure.
Peter Perry, Welsh Water chief executive, said the company was "very sorry that this happened".
He said the governance and management oversight failures identified by the company and subsequently investigated by Ofwat had now been addressed.
"We proactively brought this issue to Ofwat's attention in April 2022 having identified it as part of our annual performance assurance process," he said.
"Ofwat's key conclusions as to what went wrong align with our own investigations that were shared with Ofwat together with our proposals for customer redress and additional investment to tackle leakage and per capita consumption."
He added that achieving the planned reduction in leakages would be challenging but that the company was "committed to a substantial increase in expenditure in this area and (had) strengthened the relevant operational teams".
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