U.K. Water Regulator Challenge Casts Doubt on Super-Sewer

Britain’s biggest water and waste company is facing questions from regulatory authorities over its bid to raise customer bills by about 8 percent a year to help pay for a “super-sewer” project in London.

Ofwat is challenging Thames Water Utilities Ltd.’s request to increase household bills by about 29 pounds ($46) a year, it said today in a statement. The regulator says Thames Water has underspent on sewer-flood and sewage-treatment works and failed to sufficiently maintain parts of its wastewater network.

“We have been clear that we would challenge Thames’s proposed bill increase,” Sonia Brown, chief regulation officer at Ofwat, said in the statement. “So we are looking to see if there are areas where we can claim back money for customers.”

Thames Water says the London-based utility needs the extra money to help buy land to build its 4.1 billion-pound Thames Tideway Tunnel, a sewer project that would follow the course of the capital’s river. The Kemble Water Holdings Ltd. unit, which has 14 million customers in the London area, said Aug. 12 it expects to spend about 273 million pounds purchasing the land.

“We expected the regulator to set out the format for assessing our application,’’ Thames Water said in response. “This is part of the regulatory process. We don’t plan to comment until after Ofwat’s draft decision, expected in mid-October.”

The average Thames Water bill is about 354 pounds, which it says is among the lowest in the country. Ofwat will make a final decision in early November and any permitted price increases will take effect from April.