South East Water could lose its operating licence after thousands of residents across Kent and Sussex faced up to a week without water. Environment Secretary Emma Reynolds has called on regulator Ofwat to review whether the company is meeting the requirements of its licence, following two major supply interruptions in as many months.
Around 30,000 properties experienced low or no water this week, with 17,000 still affected, many in Tunbridge Wells. The town suffered a similar outage before Christmas affecting 24,000 households for two weeks. The company blamed bad weather and leaks from ageing pipes.
Reynolds described the situation as “completely unacceptable” and demanded an explanation from the company’s chair. If Ofwat finds a breach, penalties could include a fine of up to 10% of annual turnover or revocation of the licence, which would trigger a special administration regime. Ofwat already has an active investigation into South East Water’s supply resilience.
Chief executive David Hinton, who earns a base salary of £400,000 plus a £115,000 bonus, faced criticism for not appearing publicly during the crises. He told a parliamentary committee he gave himself eight out of ten for handling shortages and avoided interviews to prevent questions about his pay. NatWest Group Pension Fund, which owns 25% of the company, issued a rare warning saying it was “extremely concerned” and would press the board to resolve the issues.
