Water firm plans £29 surcharge

Thames Water director Richard Aylard has told ITV News that the water regulator Ofwat didn't plan ahead for their big infrastructure projects, such as the Thames Tideway Tunnel, despite knowing the funding would be necessary.

He told ITV News Business Editor Laura Kuenssberg the company would have taken responsibility for funding the project, if they had been allowed to make an allowance for the scheme.

Millions of households could end up paying more on their water bill because Thames Water has said it cannot keep up with spiralling costs.

Fourteen million customers face paying a one-off charge of £30 so that the company can balance its books.

In spite of profits of £150 million, Thames Water said it's unable to control costs in the way it had predicted.

Luke Hanrahan reports:

Business Editor Laura Kuenssberg has told ITV London that Thames Water needs around £400 million to help pay towards the Thames Tideway, and because they have a "monopoly" over the water industry, customers may not have a choice but to pay the bill.

The director of Thames Water Richard Aylard has defended the company's proposal to charge customers an one-off fee of £29. Mr Aylard said that although "in principle" it will be a one-off charge, they would like to recommend "spreading if for several years".

The Lib Dems deputy leader Simon Hughes has called on the water regulator Ofwat to reject a request from Thames Water to raise their prices to pay for the Thames Tideway Tunnel.

A spokesperson for the Liberal Democrats confirmed that the party would present an alternative method of paying for the Thames Tideway Tunnel later this month.

Sir Tony Redmond, a board member for the Consumer Council for Water has said that he wished that Thames Water could have "absorbed some of the costs" to keep customers' bill down, after they proposed an one-off fee of £29 per household.

Plans for Thames Water to charge their customers a one-off surcharge of approximately £29 have been greeted with anger on social media site Twitter.

Thames Water have applied to water regulator Ofwat to charge customers a one-off surcharge on top of their bill of £29 pounds. The company said they have been forced to deal with "unquantifiable" costs that they were not aware of when Ofwat set price limits back in 2009. Increased costs include:

• Increases in bad debt as a result of the economic downturn
• Increases to Environment Agency charges
• The costs of operating and maintaining the additional 40,000 km of sewers that were transferred to Thames Water by the government in October 2011

• Costs of land acquisition and other preparatory work required for the construction of the Thames Tideway Tunnel