Simon Hughes MP and local anti-supersewer campaigners have criticised Thames Water’s application to Ofwat to increase customers’ bills.

The net impact would result in a single, one-off additional cost of about £29 per household in 2014/15.

However, the company is is recommending to Ofwat that the additional cost is spread over more than one year.

Stuart Siddall, Chief Financial Officer of Thames Water said: “Ofwat resets price limits for each water company every five years, most recently in 2009, based on the best information available at the time.  Then, during the five year period, almost all changes to costs and revenues, whether upwards or downwards, are up to us to manage. These include the costs of dealing with severe weather, changes to financing, employment, energy and chemical costs, business rates and tax.

“However, at the beginning of a five year period there are always a small number of potentially significant costs and revenues that can be clearly identified but not quantified.  These are set out at the time of the price review and either the company or Ofwat can seek an adjustment, upwards or downwards, once the actual costs and revenues are known.  That is what we are doing now.”

Mr Siddall added: “These significant costs could not be quantified at the beginning of the current pricing period, and their scale is unique to Thames Water’s operations, project commitments and catchment area. Increasing prices is never good news, which is why the company and its shareholders are encouraging Ofwat to adapt its regulatory mechanism to allow the impact of the price increase to be spread over more than one year to avoid a spike in bills for our customers.”

Simon Hughes MP said: “Thames Water’s request to increase water prices to pay for the Thames Tideway Tunnel is totally unacceptable and I implore Ofwat to reject this request on behalf of all Thames Water customers.

“Thames Water customers should not be expected to pay a huge amount towards the tunnel, given that in the years immediately before making this request, it had assets of billions of pounds which they have paid in dividends to their shareholders.

“I am continuing to call on the government to review the cost benefit of the tunnel currently being proposed and to see if it is the best and best value solution for London’s waste. I will be presenting the case for a different solution and different financing at the inquiry which begins next month.”

In a statement, the Save Your Riverside campaign group which is fighting the proposal to use Chambers Wharf for the superseder, said: “And so it starts – the flow of money down the drain that is the super-sewer, it is interesting to note that they haven’t gone for the full £80 they claim is needed for the £4 billion sewer, so there are bound to be further attempts by Thames Water to hike their bills still higher. What is really infuriating is that this crazy waste of money will not even do the job intended as a Defra minister admitted in the Lords on July 24 that the tunnel on its own is not enough and we will also need sustainable drainage systems, which themselves will require financing no doubt mostly from consumers.

“It is good that the water regulator Ofwat is reported as being ready to challenge this proposed increase and to demand it be justified. Ofwat must use its power to stop this waste of money pushing the vulnerable in society into water poverty, while Thames Water’s investors reap the benefits. The credibility of the regulator itself is now on the line – can Ofwat prove it is an independent watchdog prepared to use its teeth on behalf of water consumers, or is it the pampered poodle on a Thames Water lead that many people suspect?

“There is no longer time pressure either to rush through this little thought out solution, as the EU recently said that they wouldn’t hold us to the fines for not cleaning the river Thames by 2020 – as long as we can show effective solutions are being looked at. Also this is no longer simply a water rate payer issue, given the super sewer is now deemed a national infrastructure project.

“Although the government is trying to attract private investment, the fact that after many months of discussions there is still no announcement of a funding package for the tunnel, indicates how difficult it is finding it to attract private capital for the tunnel. Not only are Thames Water’s customers facing an initial £29 increase in their water bills to pay for the tunnel, there is every risk that all taxpayers will end up footing a massive bill for this ill-conceived project.”

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