South West Water proprietor takes £16m hit from Devon parasite disaster

Pennon Group has revealed a £16million hit from the parasite contamination crisis that struck Brixham, Devon earlier this year.

The South West Water owner, which also announced rising cases of pollution spills over the last year, said the costs covered compensation to affected households, the two-month provision of bottled water to the area and ‘extensive’ clean up work.

The May outbreak hospitalised some residents and left hundreds of others ill after cryptosporidium, a parasite that causes diarrhoea and sickness, entered the local water supply.

Pennon also said heavy rainfall had impacted its pollution levels over the period 

Roughly 17,000 homes and businesses in Brixham were told to boil their water on 15 May as instances of sickness swept the town. 

Residents had to boil and then leave tap water to cool before drinking for an eight week period.

Pennon said: ‘The cryptosporidium water quality event in Brixham this summer was an incredibly rare event for SWW and we worked swiftly and diligently to identify the issue, clean the network and restore full supply to all customers.’

Pennon also said on Thursday that wet weather had ‘impacted’ the number of pollution incidents in its network this year.

It added: ‘We have continued to see high rainfall with the third wettest October to August since records began with groundwater levels remaining exceptionally high.

‘As a result there has been an increase in the headline number of storm overflow spills, however our interventions have removed two thirds of our highest spillers from 2023.

‘The continued higher than normal rainfall and water table levels in 2024 has impacted the headline number of pollution incidents, alongside the performance of a small number of treatment works.

‘We continue to invest in our infrastructure and to make targeted operational interventions to protect the environment.’

Pennon shares were down 1.7 per cent to 590p in afternoon trading.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: ‘Regulatory scrutiny on the sector remains high, and the new Labour government has promised to crack down on water companies discharging untreated sewage into lakes and rivers. 

‘The group has already brought forward £75million of planned investment to help improve its storm overflow infrastructure. 

‘But, as with all UK water companies, Pennon will need to do much more to clean up its act if it hopes to avoid paying hefty fines in the future.’