Water bills to rise by 3% a year

WATER customers face steep increases in their bills to help pay for a multi-million-pound clean-up of the Thames, it will be announced.

The average Thames Water bill is set to rise by about £37 from £211 currently to £248 by 2010, an average of 3% a year.

The proposed increases follow the embarrassing series of discharges this summer when thousands of tons of untreated effluent poured into the river, killing thousands of fish between Richmond and Hammersmith.

Customers will have to pay for a huge programme of improvements that will include work on the 57 sewage overflow pipes that line the Thames as well as upgrades of London's treatment works to help reduce 'sewage dumping' in the river.

However, there is unlikely to be money for a proposed £1.5bn super-sewer that would tackle the problem completely.

In total, Environment Minister Elliot Morley is expected to announce that Thames Water will be allowed to invest more than £2bn over the next five years in modernising the capital's antiquated water and sewer systems.

The investment will be funded largely through the higher bills charged to households in London.

Morley will be giving his final guidance to water industry regulator Ofwat, which limits how much Thames Water can raise its bills each year.

He is expected to confirm that hundreds of schemes for reducing leakage from water mains and preventing sewage from flooding homes can go ahead.

German-owned Thames had originally asked for some £4bn of extra money but this was cut back by Ofwat.

Much of the attention will be on whether Morley has allowed any extra money for schemes to protect the river following the sewage flooding of early August.

Recreational users of the river and environmentalists are demanding tough measures to end the practice of allowing untreated sewage to flow into the Thames as often as 60 times a year during wet weather.

The minister is almost certain to stop short of giving the go-ahead to the super-sewer many are now calling for

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This 'Crossrail of the sewers' as it has been dubbed, would act as a vast overflow pipe for London's 150-year-old network during heavy rain.

Untreated sewage in central and west London would be transported through the 20-mile pipe under the Thames to west London treatment works - and would no longer have to be pumped into the river.

It has the backing of Ken Livingstone, who is worried that the regular discharges into the Thames could jeopardise London's 2012 Olympic bid.

But Ofwat believes the huge cost cannot be justified. It is now up to the Government to decide whether to overrule Ofwat and give Thames Water the go-ahead to raise bills to pay for its construction.

A final decision is expected by the end of the year. The cost of building the sewer - also known as the Interceptor - would add about £40 to bills by 2020.

Three times during this year's wet August, water carrying raw sewage was released into the river: 650,000 tonnes from pumping stations at Hammersmith and Chelsea after the deluge of 3 August; 350,000 tonnes near Battersea Park and Isleworth on 10 August, and 500,000 via the River Lea on 18 August.

The Health Protection Agency has launched a year-long study into whether the discharges are endangering the health of water sports enthusiasts.