17.05.06 Record Profits for Water Companies
Many customers who have been affected by soaring water bills may not be surprised to hear that water companies are set to announce profits of nearly £2bn this week. Results are expected to show a rise on last years profits and are even higher than Ofwat expected after agreeing to increasing household bills.
Such huge profits are undoubtably going to cause discussion amongst customers. They won't come as a surprise as most customers have seen their bills rising - on average by 8.5% and the extra money has to go somewhere, but the question that will be asked is what is it being spent on?
It seems unfair that at a time when we are paying more than ever for our water and the companies are obviously benefiting from this that we are then not getting full use of our supply. Drought orders have been imposed by several companies and 13 million people are already being affected by hosepipe bans in the south. Yes, these restrictions have been put in place due to a particularly dry winter but there is also evidence to suggest a lot of water is still being lost from unrepaired leaks.
I saw a picture yesterday in the Metro of people avoiding a burst water pipe which was flooding huge amounts of water into the road in central london - yet many people are not allowed to wash their cars or water their lawn! Thames Water has in fact been reported as one of the worst offenders for not meeting targets and last year 915 million litres a day leaked from their pipes!
So will this profit actually benefit such problems? In response to these higher than expected profits, the Consumer Council for Water asked that the companies would use some of this money to reducing leakage and build new water supplies. Ofwat stated that the current system does mean that extra profits eventually get passed onto the customers - but not immediately it seems. If companies over perform, they can keep this money for five years and then after this it will be passed on in investment or reduced bills. So may we not see improvement or reduction until 2010??
Comments
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My partner has lived in the Herts area for 9 years. 5 years ago, there was a leak outside a pub. The road subsided due to the leak, it was never investigated just filled in, and days later the water subsided the road and the same happend. This went on for 5years. An email was sent to the water company just before Christmas regarding another matter, but the issue about the leak was raised and for the length of time it was still leaking, they never mentioned this in their reply. I and my partner and many other people feel al these utility companies want their profits but not ploughing enough back in. If we paid more in the charges, we still would get ripped off.
Posted by Vivien Morlang, 13th June 2006