Southern Water could face £176m of ‘claw backs’

Ofwat has named Southern Water as an underperformer after discharges from sewage treatment works and flooding to properties.

Southern could now face a shortfall levy of £150m for non compliant sewage discharges and pipe blockages, as well as a revenue reduction of around £26m for ‘below-average performance on customer service’.

An Ofwat spokesman said: “We are currently in the process of setting prices for Southern Water over the next five years.

“As part of that process, we need to look at whether the company has delivered what customers have paid for over the last five years.

“We have challenged Southern, and in particular still have questions over how they have operated their sewerage network and treatment works.”

However, he added this was only a draft decision and that Ofwat was waiting to see what evidence Southern has to justify its work.

The news comes after an investigation was launched by the Environment Agency into the actions of the water company, which last month dumped raw sewage into Littlehampton’s sea.

It followed a fault at the company’s treatment facility in Sea Road, Littlehampton, which forced Southern to expel sewage to protect homes from potential flooding.

A spokesman for the water company explained that the planned shortfall of £176 million related to the company’s operational and customer service performance since 2010 – in particular, the treatment processes at a small number of our 368 wastewater treatment works.

However, he added: “Importantly, Ofwat’s concerns do not relate to impacts on public health or bathing water quality.

“Ofwat has asked us for further information and evidence to support our view that no ‘penalty’ should be imposed and we are currently finalising our response.

“However, no decisions on a final business plan have been made and the process of reaching a ‘final determination’ continues, as is normal process in the five-year business planning process.”

Ofwat will make its final decision in December.