Hosepipe ban from firm that leaks 21m gallons a day: Company's shame

Hosepipe ban from water firm that leaks 21 million gallons every day: Shame of company run by ‘Vampire Kangaroo’ bank

• Southern Water faces new criticism after ordering the first ban of the summer
• It was one of two firms given a one-star rating by the Environment Agency
• And the company is controlled by a notorious Australian investment bank
• Its British-born chief executive was most recently paid £14.8million with perks

It earned notoriety for its record polluting rivers.

Now Southern Water faces new criticism after ordering the first hosepipe ban this summer – while its faulty infrastructure leaks almost 21million gallons of water a day.

It was one of two firms given a one-star rating – meaning it was ‘terrible across the board’ – in an excoriating assessment of the industry’s environmental performance by the Environment Agency two weeks ago.

The company is controlled by the notorious Australian investment bank Macquarie, dubbed the Vampire Kangaroo because of its tough approach to business.

Southern Water’s Temporary Use Ban will see gardeners fined for hosing down parched plants

Its British-born chief executive Shemara Wikramanayake, whose latest annual pay packet totalled £14.8million, was one of 60 present and former staff to be named in 2020 as suspects by German authorities in a probe into sham trading schemes.

Southern Water earned notoriety for polluting rivers. Now it’s banning hosepipes (file image)

Macquarie previously owned Thames Water, where it loaded the company up with £10billion of debt. It has now increased the debt pile at Southern Water from £5billion to £6billion after taking it over last August.

That was part of the reason why an operating profit of just over £16million at Southern for the year to the end of March turned into a loss of almost £848million.

It meant the company gained a tax credit for the year of more than £86million – which can be offset against future tax bills.

Days before the Environment Agency assessment of Southern, chief executive Ian McAulay retired after picking up a £1.4million pay packet for his final year, partly bumped up by a bonus linked to Macquarie’s takeover.

Southern Water was fined more than £200million by regulators over thousands of illegal discharges of sewage that polluted rivers and waterways in Kent, Hampshire and Sussex between 2010 and 2015.

WHAT IS BANNED? 

Southern Water have outlined the following activities as being forbidden under their Temporary Use Ban

Watering a garden using a hosepipe 

Cleaning a private motor-vehicle using a hosepipe

Watering plants on domestic or other non-commercial premises using a hosepipe

Cleaning a private leisure boat using a hosepipe

Filling or maintaining a domestic swimming or paddling pool

Drawing water, using a hosepipe, for domestic recreational use

Filling or maintaining a domestic pond using a hosepipe

Filling or maintaining an ornamental fountain

Cleaning walls, or windows, of domestic premises using a hosepipe

Cleaning paths or patios using a hosepipe

Cleaning other artificial outdoor surfaces using a hosepipe

Mr McAulay, who took over as chief executive in 2016, was at the helm when Southern came under fire over a major sewage spill in Hampshire’s Langstone Harbour, a wildlife conservation area.

Drone footage showed a pipe spewing out its contents for more than two days – one of more than 50 spills of untreated waste water on a single day last October.

Mr McAulay infuriated environmentalists when he tried to play down the incident, saying: ‘It was a permitted release of storm water that has been wrongly described as “sewage” – it comprised 96 per cent rainwater.’

He was then succeeded as chief executive by Lawrence Gosden, another industry veteran, this month.

His pay package has not yet been disclosed, but if it is on a par with his predecessor, it would mean a base salary of £435,000.

Mr Gosden had previously spent 12 years at Thames Water, owned by Macquarie until it sold its final stake in the business in 2017.

The Australian bank’s 11-year stewardship of Thames saw it pay out more than £1billion in dividends while loading the firm up with £10billion of debt.

It paid little corporation tax in the UK, exploiting a complex – but legal – corporate structure using subsidiaries in the Cayman Islands, a tax haven.

Days after Macquarie’s exit, Thames Water was fined £20million – a record at the time – for a series of pollution incidents on the River Thames.

The Environment Agency said these were ‘caused by negligence and led to the death of wildlife and distress to the public’.

Martin Bradley, of the Australian bank’s asset management arm, said after the pollution incidents last October it would help Southern Water ‘improve its performance, financial resilience and relationship with customers’.

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