Utility Week

UTILITY Week 7th July 2017

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6 | 7TH - 13TH JULY 2017 | UTILITY WEEK People & Opinion Thames Water is making progress Opinion Sir Peter Mason, chairman of Thames Water Utilities T hames Water's bBoard, investors and executive team have given careful thought to the matters raised by Jonson Cox, in his capacity as chair of Ofwat, in his recent column. We agree with the direction he is setting and I am pleased to have this opportunity to respond. Everyone at Thames Water takes our role in sup- plying London and the Thames Valley with water and wastewater services extremely seriously. We are well aware of our responsibilities to our customers, the envi- ronment and the national economy. During the past ten years, the overall performance of our business has been fundamen- tally sound. We have supplied our customers with high quality water, consistently receiving the lowest rate of complaints about water quality of all of the major water companies. Our prices have remained amongst the lowest in the country and the £1 billion we have invested each year during the last decade represents one of the highest rates of investment per customer in the sector. However, not everything has gone well and we are the first to admit that our perfor- mance last year fell short of what we – and our customers – expect. For the first time in 11 years, we failed to meet our annual leakage target, by a significant margin, and we incurred a huge fine for pollution events that took place between late 2012 and early 2014. We make no excuses for those failures. Meeting agreed targets, protecting the environment and comply- ing with the law are fundamental requirements of our business and we expect to be held to account whenever we fail to meet the required standards. The full impact of the pollution fine is borne by our shareholders. The cost of the automatic penalty for failing to meet the leakage target will be returned to our customers through lower bills between 2020 and 2025. We recognise that further financial sanctions may follow as a result of ongoing investigations and the length of time it is likely to take to get our leakage performance back on track against demanding targets. What will be of equal or greater interest to our customers and stakeholders is what we are doing to put things right. This is an important moment for Thames Water. It will take time to embed the necessary changes and fully address major challenges, but a whole new chapter is opening. Thames Water and its shareholders share a genuinely long-term outlook and a commitment to the future of the business. We have brought in a new senior management team, adding new energy and ideas to the existing store of experience and knowledge. These changes lay the foundations for improving operational performance, enhancing customer service and meeting the new challenges ahead. In his article, Jonson Cox set out five specific points for us to address. I am pleased to say that we are already working in each of these areas. We recognise the importance of good customer com- munications. It is a basic requirement that we should be able to engage quickly and effectively with every customer on their own terms, using whatever channel they prefer in the circumstances. While there is still room for improvement, we have recently delivered a step change in our social media capacity, which has been well received, as have the developments in our online account management. At a more fundamental level we have recognised the need for significant improvements in the customer care, information and billing systems which underpin all our interactions with our customers. Significant investment is under way in this area of our activities. The suggestion that we should publish an annual audited statement, taking prominence over our financial disclosures and explaining clearly how we have set out to deliver for all our customers seems to us to be a good idea. We will therefore do this, starting with next year's annual accounts. Our statement will look at both short- term and long-term issues, including customer service, resilience and the health of our assets. It will describe the aspirations that underpin our decision-making, the

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