PN 17/05: Water industry reduces leakage but targets missed by Thames and United Utilities
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PN 17/05

14 July 2005
Water industry reduces leakage but targets missed by Thames and United Utilities

Water companies in England and Wales reduced the amount of water lost to leakage in 2004-05, according to new figures published today by Ofwat.
  • Total reported leakage by the industry fell by 41 megalitres per day (Ml/d) to 3,609 Ml/d. The amount of water saved is enough to supply the daily needs of more than 100,000 households.
  • Almost all water companies continued to meet their leakage targets.
  • Thames Water reduced total leakage for the first time in four years, by 30 Ml/d (over 3% of its total leakage). It missed its leakage target by 10 Ml/d. But Thames has reported further leakage reduction since the start of April.
  • United Utilities Water, in the north west of England, reported increased leakage, and missed its target by 30 Ml/d. The company is committing more resources and has reported leakage reduction since April.

Leakage was still unacceptably high in London at 915 Ml/d. Ofwat has set Thames the target of reducing this to a cost-effective level of 725 Ml/d by 2009-10.

Ofwat and its Reporters will continue to scrutinise closely the progress Thames is making with its plan, agreed with the regulator, to restore leakage to its target level and achieve adequate security of supplies. Ofwat will continue to receive quarterly progress reports.

The company is already carrying out 60% more repairs than two years ago. In addition, Thames has started a major upgrade of its water distribution network in London. This will involve replacing more than 1,200 km of water mains over the next five years at an estimated cost of nearly £500m.

United Utilities reported rising leakage for the third year running. Ofwat has now approved United Utilities' action plan which is expected to reduce leakage in line with the targets set by Ofwat. This includes extra progress reports to monitor its leakage control work.

Commenting on the new set of leakage data, Philip Fletcher, Director General of Water Services, said:

"I am pleased that total leakage has fallen. However, I am still concerned about the situation in the north west and especially in London. We will continue to monitor closely the leakage control work of Thames and United Utilities to ensure they improve and meet their leakage targets.

"Although Thames started to work hard four years ago on the agreed action plan to understand and reduce leakage in London, levels have only recently started to fall. The huge difficulties in turning round rising leakage should be a clear warning to all companies that they must be vigilant in controlling leakage.

"I now have the power to fine a failing water company – I should not hesitate to use these powers if I thought that a company was not complying with its duties or was exposing customers to worsening security of water supplies by failing to achieve cost-effective levels of leakage."

Mr Fletcher added:

"The current water restrictions in the south east, resulting from the exceptionally dry weather, have brought leakage into sharper focus. Although the water restrictions are not caused by high leakage – leakage for most of the companies affected so far is among the lowest in the country - every litre saved whether by reducing leakage or by customers using water wisely will help to prevent the situation worsening."

Overall, water companies have achieved nearly 30% reduction in leakage – 1,500 Ml/d – since 1994-95. As part of the 2004 price review, Ofwat published annual leakage targets to 2009-10 for all water companies in England and Wales. Achieving these targets will result in a further reduction of 8% in leakage (315 Ml/d). The bulk of this reduction will be delivered by Thames Water where a 190 Ml/d reduction is expected.

Notes to Editors:
1. The Director General of Water Services is the economic regulator of the water and sewerage companies in England and Wales. He exercises his powers in a way that he judges will allow them to carry out their functions properly, and finance them.
2. Ml/d = Megalitres per day. A megalitre is the equivalent of one million litres. It would take 2.5 megalitres of water to fill an Olympic-sized swimming pool.
3. Cost-effective/ Economic levels of leakage – the level of leakage at which it would cost more to make further reductions than to produce the water from another source (this includes environmental and social costs).
4. Reporters are independent professionals appointed by the company with Ofwat's approval. They scrutinise the company's business and report to the Director General on the reliability and accuracy of company information and any concerns they have.
5. The action plan agreed with Thames Water is set out in appendix 4 of Ofwat's report, "Security of supply, leakage and the efficient use of water 2003-04", published last December. This is available on Ofwat website's on www.ofwat.gov.uk or from the Ofwat library on 0121 625 1373.
6. A table of leakage data for 2004-05 by individual water company is attached.

MEDIA ENQUIRIES TO OFWAT PRESS OFFICE ON: 0121 625 1416/1496/1442
Out of hours enquiries to pager: 08700 555 500 water 502/503. Ofwat publications and press notices can be found on Ofwat's website at: www.ofwat.gov.uk



Company leakage performance against 2004-05 targets

2004-05 target
(Ml/d)
2004-05 performance (Ml/d)
Target met
Water and sewerage companies
Anglian
215
215
YES
Dŵr Cymru
230
225
YES
Northumbrian North(1)
160
155
YES
Northumbrian South(2)
70
67
YES
Severn Trent
505
500
YES
South West
84
83
YES
Southern
92
92
YES
Thames
905
915
NO
United Utilities
470
500
NO
Wessex
74
73
YES
Yorkshire
300
295
YES
WaSC
3105
3120
-
Water only companies
Bournemouth & W Hampshire
22
22
YES
Bristol
54
53
YES
Cambridge
14
14.2
NO(3)
Dee Valley
11.5
10.6
YES
Folkestone &
Dover
8.4
8.4
YES
Mid Kent
29
29
YES
Portsmouth
30
30
YES
South East
69
69
YES
South Staffordshire
75
74
YES
Sutton & East Surrey
25
24
YES
Tendring Hundred
5.1
5.0
YES
Three Valleys
150
150
YES
WoC
493
489
-
Industry
3598
3609
-


(1),(2) Northumbrian North refers to Northumbrian Water and Northumbrian South to Essex & Suffolk Water (a company that supplies water services only).
(3) Although Cambridge Water narrowly failed to meet its target in 2004-05 it remains within the three-year rolling average which Ofwat uses as a guideline. No special regulatory action is needed. All other companies apart from Thames and United Utilities stayed within this average.

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