South West Water has agreed to pay a £24m penalty for illegal sewage discharges into the environment from its treatment works.
The regulator for the water and wastewater sector in England and Wales, Ofwat, says the company, which has 1.8 million customers in Cornwall, Devon, the Isles of Scilly and parts of Dorset and Somerset, is being penalised for dumping sewage in breach of its legal permit conditions.
But there was anger over revelations on Thursday that the regulator had not imposed a direct fine on the company.
South West Water put forward the suggestion that it would invest £20m to reduce sewage discharges at key storm overflows, spend £2m to tackle sewer misuse and misconnections, and another £2m to support local environment groups. This was accepted by Ofwat rather than imposing a fine of £19m.
But Rob Abrams, the campaigns manager at Surfers Against Sewage, said allowing water companies to choose their own penalty was farcical.
He said the situation “illustrates a water industry model that’s broken beyond repair, with government and regulators subservient to industry and its rampaging pursuit of profit, at any cost”.
Ofwat said it had chosen this route rather than imposing a fine because it was satisfied the company would carry out the work required to bring its infrastructure back into legal operation.
“We have … concluded that it would be appropriate to accept the undertakings in lieu of the financial penalty we would otherwise impose in this case (£19m, 6.5% of its relevant turnover),” Ofwat said.
The regulator carried out a two-year investigation, which found the company had failed to upgrade its treatment works to prevent sewage discharges into the environment, failed to properly deal with the content of its sewers and failed to put in the resources to monitor its treatment works properly.
The penalty is the latest in a continuing investigation by Ofwat into several water companies over widespread illegal sewage dumping across the network from thousands of treatment plants.
Penalties totalling more than £160m have already been imposed against Yorkshire Water, Thames Water and Northumbrian Water for widespread illegal sewage dumping from their treatment works.
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Lynn Parker, the senior director for enforcement at Ofwat, said the regulator had secured the £24m package and a commitment to put things right from the company.
But Abrams said it amounted to a cynical PR exercise and an abdication of responsibility by Ofwat.
“There is no transparency about how the money will be spent or whether it’s even enough,” he said. “Of the £4m pledged for environmental initiatives and local groups, we’ve been given no clarity on who will benefit or why.”
The public and other stakeholders can make representations about the size of the penalty before Ofwat makes its final decision.
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