Thames Water's London contractors were given a £150M boost this week after the industry watchdog forced it to splash out on 368km of new water mains for the capital.
The water company escaped a fine from the water regulator Ofwat for missing its 2005/6 leakage reduction targets but instead must carry out an additional £150M of mains replacement work. Work that it cannot charge customers for.
Ofwat chairman Philip Fletcher said: 'This measure directly addresses the issue of London leakage and in Ofwat's view is much more appropriate than a fine. It will come entirely out at the shareholders cost and be just as painful as a fine.'
Thames missed its 2005/6 leakage target of 860 megalitres per day (Ml/d) by 34 Ml/d (News last week).
By 2008-9, Thames will be expected to have leakage down to 745ml/d, back on track with Ofwat's original targets before this week's announcement.
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