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18/04/2008
Consumer Council For Water 'Disappointed Fine Will Not Benefit Customers'
Following Ofwat's announcement that Thames Water will pay a reduced fine of £9.7 million, down from £12.5 million, for misreporting information to the regulator and failing to provide some customers with compensation payments, the Consumer Council for Water is surprised that Ofwat has decided to reduce the fine, and disappointed that the money will go to the Treasury, rather than to benefit consumers.
Any water company that breaks the rules must be penalised and dealt with in the strongest way possible, but there is another way to do this and benefit consumers at the same time. The regulator can instead negotiate an extra investment package at a cost to shareholders which is much larger than a traditional fine.
Alternatives to fines have been used before. For example, in 2006, Thames Water reported missing its leakage target, but instead of a fine going to Treasury, it was agreed that a more suitable punishment would be for the company to invest an extra £150 million of company shareholders' money to replace ageing pipes. This cost shareholders twice as much as the maximum fine Ofwat could have imposed on the company, and the extra investment is directly benefiting consumers, not the Treasury.
This latest fine against Thames Water added to other confirmed fines against Southern Water (£20.3 million), United Utilities (£8.5 million) and the intended fine against Severn Trent (£35.8 million), means that over £74 million could end up with Treasury, instead of being used to benefit consumers.
(CD/JM)
Any water company that breaks the rules must be penalised and dealt with in the strongest way possible, but there is another way to do this and benefit consumers at the same time. The regulator can instead negotiate an extra investment package at a cost to shareholders which is much larger than a traditional fine.
Alternatives to fines have been used before. For example, in 2006, Thames Water reported missing its leakage target, but instead of a fine going to Treasury, it was agreed that a more suitable punishment would be for the company to invest an extra £150 million of company shareholders' money to replace ageing pipes. This cost shareholders twice as much as the maximum fine Ofwat could have imposed on the company, and the extra investment is directly benefiting consumers, not the Treasury.
This latest fine against Thames Water added to other confirmed fines against Southern Water (£20.3 million), United Utilities (£8.5 million) and the intended fine against Severn Trent (£35.8 million), means that over £74 million could end up with Treasury, instead of being used to benefit consumers.
(CD/JM)
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04 July 2006
No leakage fine for Thames Water
Thames Water has escaped being fined by regulator Ofwat for failing to meet its targets on leakage reduction. However, Ofwat has ordered the firm to invest a further £150 million in order to reduce leaks. Thames Water had been facing the prospect of being fined £140 million. The news is likely to lead to criticism of Thames Water.
No leakage fine for Thames Water
Thames Water has escaped being fined by regulator Ofwat for failing to meet its targets on leakage reduction. However, Ofwat has ordered the firm to invest a further £150 million in order to reduce leaks. Thames Water had been facing the prospect of being fined £140 million. The news is likely to lead to criticism of Thames Water.
08 April 2008
Ofwat Proposes Huge Fine For Severn Trent
Birmingham water company, Severn Trent Water could be presented with a £35.8 million fine for misleading customers and offering poor service. Water industry regulator Ofwat is planning to fine the firm £34.7 million for fraud and £1.1 million for "substandard" service.
Ofwat Proposes Huge Fine For Severn Trent
Birmingham water company, Severn Trent Water could be presented with a £35.8 million fine for misleading customers and offering poor service. Water industry regulator Ofwat is planning to fine the firm £34.7 million for fraud and £1.1 million for "substandard" service.
09 May 2008
Network Rail Handed £14 Million Fine By Regulator
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Network Rail Handed £14 Million Fine By Regulator
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20 December 2007
Ofcom Fine Channel 4 £1.5 Million
Media watchdog Ofcom has fined Channel 4 £1 million over misconduct involving competition phone-ins. It emerged that viewers had been urged to make calls after the competition winners had already been chosen on Richard and Judy.
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