Thames Water Investment for Future

The proposed cost of GBP6.5 billion will be the largest ever programme of investment undertaken by a UK water company, however by 2015, on average, customers will still be paying less than GBP1 a day (exc.inflation) for all their water and waste water needs.

David Owens, Thames Water's Chief Executive Officer, said to be committed to providing the best-in-class water and sewerage services for Thames Water customers at prices they can afford. In drawing together these plans the company have undertaken the most extensive public consultation in their history. The customers have told what they want the priorities to be, and what they would be willing to pay for. What we have produced reflects these views.

Owens: "Thames' customers have enjoyed the lowest bills in the industry for many years, but we now need to make essential investment to secure their services for the future. This is particularly true for London, where the water and sewerage infrastructure is ageing. There will be an inevitable impact on bills, but even so, we will be able to keep them below the industry average.

"The plan focuses on maintaining and improving the service we provide to our customers; it will help guarantee their supplies for the future, and ensure that we are able to cope with future challenges - not only population growth and climate change, but tighter environmental and legislative  requirements. Above all, we recognise that it must be affordable. Ultimately it will be up to the independent regulator, Ofwat, to decide the price we are allowed to charge to provide these services.

"By targeting investment where it's needed most and where our customers want, we have been able to propose a programme which should keep price rises at a reasonable level. The average bill is expected to rise by around 3% over inflation each year, so in five years' time customers will still only be paying around a GBP1 a day for all their water and waste water services, representing excellent value for money".

The plan is built around four main objectives, based on the company's discussions with customers and other stakeholders:

Secure service levels

Surveys said: Customers expect current levels of service to be maintained, however, this is in the face of an increase in demand and ageing infrastructure. The population in the Thames Water region is expected to swell by more than 380,000 in the next five years, and investment will be needed to ensure demand does not outstrip supply and infrastructure is able to cope. In addition the age of much of our infrastructure, particularly in London where around half the water mains are over 100 years old, means more investment will be needed for maintenance and replacement.

Thames Water will invest heavily in keeping its existing assets, such as the major water mains and sewers, in good condition. In addition, the company proposes to start building a new reservoir in Oxfordshire, which will be essential to help secure water supplies for the future, and which will provide up to 10% of the region's water when completed in 2021.

Be responsive

Surveys said: Customers expect Thames Water to respond to the issues that cause them greatest concern. Our research revealed that the issues of sewer flooding, odour from sewage treatment works and levels of customer service were priorities.

Thames Water plans an increase in investment on tackling sewer flooding, to reduce those properties at risk of flooding with sewage by nearly a quarter. Programmes to reduce odour will are planned at sewage treatment works around the region, and customer service performance will be transformed with the goal of halving the level of complaints.

Act sustainably

Surveys said: The impact Thames Water have on the environment was identified as a major issue of concern to customers polled. Dealing with climate change, reducing the carbon footprint and encouraging more efficient use of water were identified as areas we should address.

Over the next five-year period Thames Water aim to reduce their carbon emissions by 20%, and reduce leakage from our pipes by 18%. In addition, the company will be installing a million water meters, to raise the total number of metered households to 54%, compared to 25% today. The quality of the River Thames and the lower River Lee will be improved by building the Lee Tunnel and improving Beckton sewage treatment works, which will dramatically reduce the volume of sewage overflows entering the river. In addition, Thames Water will be improving the quality of around 250km of other rivers in the region.

Ensure value for money

Surveys said: While average bills for Thames Water customers have always been among the lowest in the UK, customers were concerned that they should continue to be affordable, given the levels of investment planned. There was also concern that vulnerable customers should be protected as far as possible from the impacts of price increases, and their needs addressed as part of any wider programme of metering.

Thames Water will continue to drive down its running costs and spend customers' money efficiently; social tariffs will be developed to help customers in most need, with a range of different tariffs trialled, aimed at promoting water efficiency and reducing bill impacts; in addition a new charitable trust will deliver direct assistance to people in real difficulty.

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