Welsh Water to pay out nearly £40 million after misleading Ofwat over poor performance
"Indefensible" actions by Dŵr Cymru Welsh Water will see the firm pay out £40 million after misleading the industry watchdog Ofwat.
An investigation revealed that the water company had misreported its record of tackling leaks and saving water over a period of 5 years.
Ofwat has now ordered Welsh Water to pay £39.4 million to compensate for failing customers.
£15 million has already been announced by the firm, another £9.4 million will follow and see customers bills lowered.
An extra £15 million of costs will be absorbed by the customers, according to Ofwat.
It comes amid increasing scrutiny of the water industry and an outcry over the sector’s dire performance on leaks, raw sewage spills and poor customer service.
David Black, chief executive at Ofwat, said: “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 £40 million 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.”
The Chief Executive of Dŵr Cymru Welsh Water has apologised for the failures in governance and management oversight processes.
“We are very sorry that this happened. We proactively brought this issue to Ofwat’s attention in April 2022 having identified it as part of our annual performance assurance process.
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. Rebates have already been made to 1.4 million customers.
“Our review identified governance and management oversight failures that led to the issues identified which have now been addressed.
"Achieving the planned reduction in leakage will be challenging, but we have committed a substantial increase in expenditure in this area and strengthened the relevant operational teams to recover performance.”