Welsh Water, officially Dŵr Cymru, is set to pay a proposed £44.7 million after Ofwat found “serious and unacceptable” breaches in the company’s sewage and network operations.
The regulator criticised the not-for-profit utility for failing to properly maintain, operate, and upgrade its wastewater systems to cope with sewage levels, alongside inadequate senior oversight.
The enforcement package includes £40.6 million to cut spills at storm overflows, reduce environmental damage, and tackle groundwater entering the sewer network. An additional £4.1 million will fund improvements in “extremely sensitive” river catchments. It is among the largest fines ever imposed on a water company in the UK.
Lynn Parker, Ofwat’s senior director for enforcement, said: “Our investigation has found serious and unacceptable breaches in how Dŵr Cymru Welsh Water has operated and maintained its sewage works and networks, leading to excessive spills from storm overflows into the environment. We now expect them to focus on corrective action so customers can regain trust in the service they provide.”
Dŵr Cymru supplies drinking water and wastewater services to three million people across Wales and parts of Herefordshire. Unlike English water companies, it operates on a not-for-profit basis.
In 2024, Natural Resources Wales (NRW) reported that Dŵr Cymru had the highest number of sewage pollution incidents in a decade, marking a 42% rise over ten years. Six serious incidents were recorded, down from seven in 2023.
The company has faced previous regulatory penalties, including a £40 million fine from Ofwat in March 2024 over allegations that it misled customers and regulators on leakage and per capita consumption. James Bevan, former chief executive of the Environment Agency, recently joined the board of Dŵr Cymru’s parent company as a non-executive director.
The proposed fine comes as Welsh Water bills are due to rise again next month, with projected increases of 42% by 2029-30. A spokesperson for the company said: “We accept the findings of Ofwat’s investigation and apologise for falling short of the standards our customers and regulators expect. We have launched a major transformation programme across wastewater services to improve performance, strengthen operational oversight, and accelerate investment for better river and coastal outcomes.”
Ofwat has also proposed a £22 million fine for South East Water over repeated supply failures affecting 286,000 people between 2020 and 2023. The action against Dŵr Cymru is the seventh case in Ofwat’s sector-wide sewage investigation, bringing total fines in the programme to over £300 million.
NRW’s 2025 reforms promise a new monitoring team, clearer guidance on pollution reduction targets, and a stricter annual performance framework. The UK government plans to replace Ofwat with a new Welsh water watchdog, although it is not yet confirmed whether this will be a completely new body or an expanded role for NRW.