South West Water to pay out £24m over leak failures

(Sharecast News) - South West Water is to pay out £24m after failures in waste water management led to unauthorised spills, it was announced on Thursday. Regulator Ofwat said the utility, part of Pennon Group, had agreed to pay the enforcement package after it failed to meet legal obligations concerning the management of wastewater works and networks.

"These failures resulted in the company spilling wastewater to the environment when it should not have done," it said.

South West Water supplies households and businesses across Devon and Cornwall as well as some parts of Dorset and Somerset.

Under the package, £20m will be invested over the next five years to reduce spills from specific storm overflows, £2m will be used to set up a local fund to tackle sewer misuse and misconnections, and a further £2m will support local environmental groups.

The package was proposed by South West Water, in lieu of a financial penalty. Ofwat accepted that the utility had "recognised its failures".

Lynn Parker, senior director for enforcement at Ofwat, said: "Water companies should be in no doubt that they will be held to account if they fail to meet their legal obligations to customers and the environment.

"Our investigation found a range of failures in how South West Water has gone about managing its wastewater business.

"This is why we have secured the £24m package and a commitment to put things right."

Pennon said: "Ofwat has recognised the work South West Water has done to improve systems, processes and controls in this area in recent years, and the investments already made to address these historical findings."

As at 0815 BST, shares in the FTSE 250 group were up 1% at 497.8p.