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Figures released by Ofwat today reveal that for 2006-07 overall leakage fell:
"Reducing leakage is one very important way to ensure that we use water efficiently. By beating its leakage target for the year ending March 2007, the water industry has demonstrated that it can respond to customer needs driven by issues like water shortages and drought. We expect the industry to continue to respond to these challenges and continue to hit their regulatory targets." Only one water company did not meet or exceed its target. Severn Trent Water's target was to reduce leakage by 17 Ml/d. Leakage did fall by 9 Ml/d, but the company missed its leakage target by 8 Ml/d. Ofwat has secured a legally binding undertaking from Severn Trent Water that binds the company to achieving its leakage reduction targets for the next three years and improving its ability to deliver its planned level of water service to consumers. The company has underpinned this with a commitment to spend an extra £45 million at the expense of its shareholders. Severn Trent Water has also agreed to reduce charges to its customers in 2008-09 by around £12 million. Ms Finn said: "Despite favourable conditions, in particular a very mild winter, Severn Trent Water failed to meet its leakage target. This is unacceptable. The company will now have to make huge efforts to put this right. The money it needs to spend to do this will not come from customers. Should Severn Trent Water not live up to this commitment, enforcement action will follow, including fines if necessary. "We recognise that Severn Trent Water faces other more immediate priorities in dealing with the aftermath of recent floods, but it must not lose sight of the work that it needs to carry out to control leakage." Thames Water, which previously failed its leakage target, has this year exceeded its leakage target by 20 Ml/d. The company reduced leakage to 790 Ml/d. The company is bound by a legal undertaking given to Ofwat to continue achieving demanding future leakage targets, with the target for 2010 set at 690 Ml/d. To do this Thames must replace an extra 368km of ageing pipes that will cost its shareholders around £150m. This extra investment is equivalent to more than £40 for each consumer supplied with water services by the company. Ms Finn said: "Thames Water's success is good news for its customers. It shows that Ofwat's approach of focussing the company on fixing the problem at its own expense delivers the best outcome. But the company cannot afford to be complacent. There is still a lot more work that needs to be done, and, as with Severn Trent Water, failure to live up to their commitments will lead to swift enforcement action." Notes to Editors: 1. The Water Services Regulation Authority (Ofwat) is the economic regulator of water and sewerage companies in England and Wales. It exercises its powers in a way that it judges will allow companies to carry out their functions properly, and finance them. Its duties include protecting the interests of consumers, wherever appropriate by promoting effective competition. 2. Ml/d = Megalitres per day. A megalitre equals one million litres. 3. The leakage targets for Thames Water for the remainder of the 2005-10 price review period are: 2007-08 – 755 Ml/d; 2008-09 – 715 Ml/d; 2009-10 – 690 Ml/d. 4. These targets form part of the legal undertaking given by Thames Water last year, which will see the company replace at least 368km of extra mains, in addition to the 1,235km which it is already in the process of replacing in London, between 2005-10. 5. At its peak in 1994-95 overall leakage was 5,110 Ml/d. By 2009-10 overall leakage is expected to have fallen to 3,300 Ml/d. 6. A table of leakage data for 2006-07 by individual water company is attached. 7. Media enquiries to Ofwat Press Office on: 0121 625 1442/1416.
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