Thames Water avoids Ofwat fight

Thames Water has backed away from a confrontation with the water regulator Ofwat, announcing today it would not appeal to the Competition Commission over the new ruling on prices. Britain's largest water company threatened last summer to try to block the regulator's draft ruling, which sets how much companies can charge customers over the next five years. Thames had claimed it would not be able to meet its targets to reduce leakage if the ruling stood. But after lobbying by the water industry, Ofwat's final settlement was much more generous to companies. Thames, which will invest £5bn in the network, had originally been ordered to freeze bills for five years, excluding inflation. In the final ruling it may raise them 3%. today was the appeal deadline. Only one company, Bristol Water, has taken action. Martin Baggs, Thames Water's interim chief executive, said: "Ofwat has set us a particularly tough challenge but there have been some welcome changes from the draft determination and we will now get on and deliver the agreed plan." Today, Severn Trent admitted it was having to spend more than planned to fix water pipes that had burst because of the recent cold snap. The company admitted customers would face more disruption through roadworks than normal. The company also said water demand from business customers was not as weak as expected during the latter part of last year as the economy started to come out of recession. It said revenues would be down by £5m-£10m compared with the previous year, not the £15m-£20m expected.