UK Edition
Severn Trent unveils £100m spending plans
Water utility Severn Trent is preparing to splash out on a £100m investment programme that will include leak-detecting robots, after earning financial rewards from the industry regulator for beating its delivery targets.
The raft of spending will include upgrades to the pipes and pumps used by the FTSE 100 water company to serve 4.4m customers in the Midlands and Wales, as well as a team of leak detecting robots.
The devices were created by a team of developers at the Massachusetts Institute of Technology to swim through water system using small touch sensors to spot the type and exact location of a leak.
Liv Garfield, the utility's chief executive, said the “soft robot” will enter Severn Trent’s hydrants to help tackle leakage in addition to the drones and satellites the company already uses.
All water companies are under rising pressure to stem water leakage, which wastes around a fifth of the UK’s supply, and has remained stubbornly high in recent years.
The freezing conditions which swept the country in early spring caused pipes to burst in a further blow to leakage targets. Severn Trent admitted that the extreme weather broke the group’s two year run of target-beating leakage cuts after a small number of major bursts within its system.
However, Severn Trent managed to outperform the regulator’s delivery targets in its waste water business to clinch a net reward of £80m from Ofwat.
In its full year results Severn Trent revealed that overall revenue rose by 3.4pc last year to £1.7bn, while underlying operating profit climbed 4pc to £541m. Shares in the company rose more than 1pc higher to about £21 as a result.
The Ofwat reward will go towards the £100m investment boost, on top of the £120m spending programme already agreed with the regulator.
Ms Garfield said the company will invest £21m to increase the number of monitors across the network and spend a further £36m on a targeted investment programme to boost the resilience of its long-term assets.
Another £10m will be ploughed into developing skills through an innovation and training centre, she said.