Dry but high in profits

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The Independent Online
YORKSHIRE WATER is set for a torrent of political controversy over rising profits and dividends this week while the county itself runs out of water.

For the past two weeks, the privatised utility has been ferrying water in 1,000 road tankers from Northumbria to the drought- stricken region in a frantic, round-the-clock operation.

Full-year results will be severely hit by the estimated pounds 1m a week cost of the shuttle-run, while the firm still loses more than 100 million gallons a day from leaking pipes - a third of its usage and by far the worst record of any water firm, as measured by head of population.

Pre-tax profits to end-September, due on Tuesday, are expected to leap more than 40 per cent to around pounds 95m, after pounds 5m of drought costs from June.

Stripping out pounds 25m for redundancies in 1994 still leaves underlying profits nearly10 per cent ahead. That, a similar rise in the dividend and its refusal to consider compensation will fuel claims that Yorkshire puts customers last.

"Yorkshire people know they're being ripped off on service," said Frank Dobson, Labour's environment spokes- man. "It has one of the worst records on interruption of supply, the highest proportion of leaks and a bad record on complaints. They're useless all round," he added.

Yorkshire has already been ordered to spend pounds 125m over 10 years on plugging leaks and is likely to outline investment plans this week.

The firm gained the country's first drought order in June, and with reservoirs low or dry, Yorkshire customers still face the threat of standpipes or cuts by rota in supply.

"They don't need a normal winter, they need another wet winter. Otherwise they could still have problems next summer," said analyst Robert Miller- Bakewell of NatWest Markets.

To objections from West Yorkshire fire brigade over planned supply cuts last week, Yorkshire Water said it would be able to turn the mains back on "within one or two hours" if need be.