“Those investors will not only lose their reputation but also lose their investment”, said Mike Martin
Tunbridge Wells MP Mike Martin has accused South East Water of acting “like a bit of a gangster” as tens of thousands of homes across Kent and Sussex were left without water. The MP told KentLive he had written to the company’s investors, warning them their reputations and investments were at risk unless the board intervened to resolve repeated outages.
There are still many homes without water as the time of reporting (19 January) including in Bidborough near Tunbridge Wells and Maidstone. This latest crisis saw 30,000 properties in Kent and Sussex without a proper water supply for days. In December, 24,000 customers were without water for almost two weeks. On Thursday, a first-of-its-kind investigation was launched by the regulator Ofwat that will look at whether SEW breached its licence around customer care.
The company has blamed bad weather for leaks in its ageing pipe system that caused water outages across its network. Water companies have a statutory duty to maintain a sufficient supply of wholesome water to their customers. If the regulator, Ofwat, decides the company has breached its licence but decides not to revoke it, penalties include a fine of 10% of the company’s annual turnover.
Mike Martin, the Liberal Democrat MP for Tunbridge Wells told KentLive: “Water companies must provide the community with a plentiful supply of wholesome drinking water, and quite clearly South East Water have not done that here now for six weeks – more if you include all the previous outages.”
“This is the condition I really want the Government and Ofwat to look into. This is the most basic condition which goes to the heart of the matter. A plentiful and wholesome water supply. And they haven’t done that.”
‘South East Water is acting like a gangster’
The MP told KentLive that he believed those investors of the company were unaware how big the crisis was. He told KentLive: “On my side, I have written twice to the investors of South East Water because they own it, right? And they are having an income from South East Water. My basic question is are they content with this level of gangsterism? South East Water is acting like a bit of a gangster in the way it is conducting itself.”
He said: “If South East lose their licence, their investment value immediately becomes zero because South East Water can not operate, so I am asking them to intervene now before that happens, so they can put a team in immediately to turn them around because if South East Water lose their licence, those investors will not only lose their reputation but also lose their investment. Some of them are British brands like NatWest. These are serious questions for these companies.”
NatWest Group Pension Fund, a major shareholder in the company, issued a rare warning. The fund, which owns 25% of South East Water, said it was “extremely concerned” by the impact the outage was having on households, adding it would use its influence to put pressure on the board to resolve the issues.
‘Leadership are out of their depth’
David Hinton, the chief executive of South East Water, has faced cross-party political pressure including from the Liberal Democrat MP for Tunbridge Wells, Mike Martin, to resign after failing to appear in public during both crises.
Mr Martin said this is what went wrong at South East Water. He told KentLive: “Whilst the water crisis has been going on, I have had hundreds of conversations with South East Water with many different bits of South East Water. There are many, many people in South East Water who are all trying their best.”
“But leadership matters and David Hinton (chief executive) is way out of his depth and what I have observed is when this crisis hit South East, it disintegrated into lots of different teams, with no one at the top pulling the firm together. It’s about establishing a common understanding of what is going on and then directing activity – these are the basic principles of leadership.”
KentLive has contacted South East Water. The company has previously said of Hinton: “David Hinton, chief executive, remains committed to resolving the immediate issues facing customers in both Kent and Sussex, whilst continuing to seek to obtain the investment to deliver the much needed improvements in resilience to the South East Water network, detailed in the company’s business plan.”
A Defra spokesperson said: “It is entirely unacceptable that several areas in the South East have been experiencing water supply issues and water bosses must be held accountable.
“However, nationalisation is not the answer. It would cost taxpayers £100bn, diverting money from hospitals and schools, while years of unpicking the current ownership model would see investment dry up and sewage pollution worsen.
“Our Water White Paper will set out the long-term systemic reforms needed to clean up our water for good, including prioritising investment in our water infrastructure to improve resilience.”
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