Dŵr Cymru to pay out almost £40m after misleading over poor performance
Dŵr Cymru (Welsh Water) has been ordered to pay nearly £40 million to customers after the industry watchdog found the firm misled them over its record of tackling leaks and saving water.
Ofwat said an investigation that started in May last year found evidence of a “significant failure of governance and management oversight” at Welsh Water led the firm to misreport leaks and performance over a period of five years.
Redress
The company will have to pay £39.4 million in redress to customers for its failures, with £15 million already announced by the firm, and another £9.4 million to follow, which will lower bills for users.
An extra £15 million of costs will be absorbed by the water firm, rather than being passed on to customers, according to Ofwat.
Ofwat said Dŵr Cymru/Welsh Water also needed to address its poor performance on leaks and water usage, with the firm pledging to invest an extra £59 million in the current five-year price period.
It comes amid intense scrutiny of the water industry and an outcry over the sector’s dire performance on leaks, raw sewage spills and poor customer service.
There have been mounting calls for the sector to renationalised.
Scrutiny
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.”
Pete Perry, Welsh Water Chief Executive said: “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.”
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If Dŵr Cymru really want to bring things under control then they need to stop outsourcing the majority of their work and appoint customers and unions to the board.
So we can expect a substantial increase in our bills next year to recover the £40m. Customers always end up paying for incompetence. Heads of the organisation should be penalised individually not the company and ultimately the customers. By doing so they may get their act together. If they cannot do their jobs…. there’s the door. They are tip-top at collecting their bonuses. If only they had the same enthusiasm doing their jobs.
Must not interfere with a top executive’s divine right to a huge salary, bonus unrelated to any sensible performance metric, generous pension plan and assorted goodies. Enough to make me sick.
To be fair to Dwr Cymru, they brought the matter to Ofwat’s attention who agreed and followed DC’s suggestions for redress.
No one is perfect and at least they’re not privatised.
The only reason that action is being taken is because OFWAT has responsibility in both England and Wales. The rest of the time the actual spillages are down to Natural Resources Wales, which basically has ignored 99% of all illegal discharges, mainly issuing cosy, cosy improvement notices – why would one government department wish to prosecute another? Shockingly, NRW has only prosecuted Welsh Water twice in five years and costing them just £255,000, saving DC/WW potentially up to £25 million in fines. English private water companies rightly get hammered for many millions in fines – the highest be £90 million… Read more »
Dwr Cymru is an awful company. When there was a week long water issue in this area they tried to cheat those effected by reducing the compensation they had promised; there is a local drain that continously leaks raw sewerage that has been reported multiple times to no effect; raw sewerage is pumped into the Teifi even on sunny day… I could go on