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Thames Water pipe repair cuts ‘will be green disaster’
Jonathan Prynn, Consumer Business Editor24 Jul 2009
Thames has been carrying out a mains replacement scheme in London
Cuts in Thames Water's mains replacement programme threaten an “environmental disaster”, campaigners warn today.
Thames said financial constraints would force it to abandon plans to cut leakage.
It would only be able to complete 520 miles, instead of 940, of new mains for London between next year and 2015.
But Darren Johnson, chairman of the London Assembly, said: “Too much of Thames Water's revenue from bills has been leaking to its shareholders in the form of huge profits for far too long.
"If they do slash their mains replacement programme it will mean a scandalous waste of water and a continuing environmental disaster.”
But Thames Water today defended the decision, blaming Ofwat over a lack of funding.
A spokesman said: "Our business plan, sent to Ofwat, asked for a pot of funding specifically to replace 1,500km of worn-out pipes over the next five years.
"Ofwat's suggested price-setting outcome means the additional work to actually reduce leakge will now not take place. If we don't press ahead with this work, customers will simply end up paying more in future."
Reader views (6)
As a City investor myself, it annoys me when people (like Nigel) say 'just don't pay the shareholders a dividend'. It's perfectly acceptable for investors to get a modest return. I believe Thames Water's dividends were around 3% last year on about £2bn of equity. Hardly excessive. Scrapping dividends would make a firm like Thames uninvestable, shareholders would put their cash enlsewhere, and - surprise surprise - there'd be a lot more for the likes of Nigel and his chums to moan about: leaks, shortages, sewage spills etc etc.
- Mariella, Blackheath, 25/07/2009 08:40
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So Ofwat's short-termism means us lot will end up paying more in future when this mob of overpaid quangocrats wake up and say: 'Bills need to go up to tackle soaring leakage'. Pathetic.
- Xavier, Isleworth, London, 24/07/2009 19:48
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Infrastructure is not glamourous. Unfortunately too much money is poured into parks, recreation facilities, all fluff and fold sort of things that do little to keep the city functioning.
The next time some MP or council wants to spend millions on "pretty stuff" take a look at the backlog of infrastructure projects then decide if you want water, sewer, electric etc or some pretty new flowerbeds to walk the doggy through.
- Trunk, US, 24/07/2009 17:31
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If the regulator can show that Thames Water is making excessive profits, it should force them to spend the money on new pipes not on paying dividends to shareholders.
If it can't, I find it baffling that they should force Thames Water to cut back on the pipe replacement programme. In the last dry spell London almost ran out of water. If they leave off replacing the cracked Victorian pipes, next time it might be worse. Lower bills should flow naturally in the future, once there is no longer a fifty-year maintenance backlog and a third of our water leaking out of ancient cracked pipes.
- Nigel, London, 24/07/2009 13:06
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You can complain all you want, OFWAT are toothless, they don't care that Thames water is in it purely for the shareholders, they won't force them to carry out work, and why shoulkd they, they're comprised of an old boys network of ex utility directors.
- Bob, Cheam, 24/07/2009 10:23
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Who cares what Thames Water thinks. They have made travelling in London a nightmare.
If they moan again about their revenue,fine them.
- Mr S.Port, London, 24/07/2009 09:26
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