A group of Tunbridge Wells residents has attacked the water industry regulator for not taking strong enough measures to secure water supplies in the town.

The water regulator OFWAT said on Thursday it planned to fine South East Water £22 million for supply disruptions in a period ending three years ago.

But local resident Jonathan Hawker (pictured below) of the group, Dry Wells Action, said: “We are extremely disappointed that there is no action to impose leadership on this company, or to force upon it a remedial action plan for urgent improvements and expansion of the infrastructure serving Tunbridge Wells.”

Jonathan Hawker continued: “This is great news for David Hinton (chief executive of South East Water). He will continue in post, with remuneration (including vast non-performance related bonuses) of £500k each year.”

Jonathan Hawker said OFWAT’s announcement highlighted “the shortcomings of the organisations that are supposed to be representing consumers’ interests.”

He said: “Hot off the tails of the public relations own goal by the Consumer Council for Water, which decided to sneak South East Water’s chief executive, David Hinton (pictured below), into Tunbridge Wells to be “held to account by consumers”, in order to launch their consumer panel initiative, without thinking how it would look to have no consumer from Tunbridge Wells present, OFWAT has now hit us with the news that its sole sanction on the failing water company will be a fine that we will end up paying.”

Jonathan Hawker stated: “Given that South East Water has £1.3bn in debt on a turnover of less than £300mn, from which it made a loss of almost £20mn last year, it should be obvious to OFWAT that consumers will end up paying this fine either through increases in water bills or through the additional cost of debt at the company.”

He concluded: “Hitting consumers who have already suffered is not regulation. It is an admission that the regulator has no means to hold this company to account. OFWAT’s announcement is woeful.”

The Liberal Democrat MP for Tunbridge Wells, Mike Martin (pictured below), told the BBC the OFWAT fine indicated a repeated failure by South East Water to learn lessons. But the MP said the penalty was “completely toothless.”

Mike Martin said: “When you’re looking at a company that’s a billion pounds in debt, they’re not worried about a £22 million fine. What we need is something that has bite. And I think really it’s only the government that can make the decisions to push OFWAT to impose things onto companies like South East Water…and cause them to change their behaviour.”

Mike Martin MP continued: “When Emma Reynolds, the Environment Secretary, actually came to Tunbridge Wells in January, she announced that she was writing to OFWAT and asking them to investigate whether South East Water had breached the terms of their licence. All these water companies need a water licence from the government in order to operate. So the government DOES have purchase on these water companies.”

Mike Martin believes that a decision that South East Water had breached its licence would allow a “special administrative regime” to be imposed to force through investment by the company.

Mike Martin discussed the failures at the Pembury Water Treatment works which led to 50,000 people losing their drinking water for two weeks in December (area affected shown above).

Mike Martin revealed: I’ve pulled together a group of water experts to assess what needs to be done at Pembury to bring it up to scratch. To get over the under-investment backlog that we’ve suffered from for the last 20 years, it’s about 50 million quid.”

Mike Martin argued: “If they’d spent that money and it (Pembury water works) hadn’t fallen over, they wouldn’t be paying fines. They wouldn’t be paying 30 million in compensation and operational costs when they have an outage. Local businesses wouldn’t be losing out.”

Mike Martin continued: “So if you put them into SAR (Special Administrative Regime), when they fail their licence, then you force through rapid investment and upscaling in pinch points like Pembury Water Treatment Works. That is what would fix this system. Water treatment works by water treatment works, storage reservoir by storage reservoir.”

Mike Martin concluded: “The government has to get a grip and get a hold of these companies.”

Meanwhile, water industry expert Charles Hedges (pictured below) told Southborough News he was waiting for a full report from the Drinking Water Inspectorate on last year’s failures at Pembury Water Treatment Works before commenting in detail.

Charles Hedges said: “South East water needs to do two things. First, provide a comprehensive chronological description of all that has gone wrong since 9th of November. And the next thing, they they need to show an organisation chart that demonstrates they’ve got the skills to undertake the engineering works to rectify all the mistakes.”

The Interim Chief Executive of OFWAT, Chris Walters, was asked by the BBC on Thursday why the regulator’s report on the 2020-2023 failures had taken three years to produce.

Chris Walters replied: “Investigations do take time, especially investigations like this, because they involve a large amount of very complex, detailed engineering information that has to be very carefully assessed…We knew that we had to be specific and careful and detailed. So we didn’t make any slip ups, and we can do the best for customers.”

Chris Walters also rejected the suggestion that customers will end up paying South East Water’s fine: “We are proposing a £22 million fine. Crucially, that’s a fine that is paid by the company and its investors, not customers. It won’t show up on customer bills.”

Chris Walters continued: “The enforcement audit will require South East Water to take concrete, specific, legally enforcible steps to do better….South East Water needs to step up and take more ownership of the problem. Take the specific steps in the action plan and work more constructively with us and with other regulators in future.”

OFWAT has opened a new investigation into South East Water’s failure to supply drinking water in December and January.

It’s also been revealed that South East Water attempted to use the courts to stop OFWAT from announcing its proposed fine, arguing that releasing the news would have a serious impact on the the company’s reputation and its credit rating.

A judge threw out South East Water’s interim injunction at a hearing in the High Court on Monday.

According to a report on the website Kent Online, South East Water claimed OFWAT had “predetermined” its findings and argued the regulator’s decision was “legally-flawed” and “riddled with errors”.

Nicholas Gibson, representing the company at the High Court, argued its shareholders “target strong investment grade credit ratings” and that maintaining those “has been – and continues to be – challenging.”

A statement presented to the court by South East Water’s chief financial officer, Andrew Farmer (pictured below), said: “I consider it very likely that publication of OFWAT’s legally flawed proposed decision, and therefore the detailed findings in the 240-page decision, would seriously damage confidence in South East Water among those working in the finance sector with…very serious adverse consequences for South East Water’s business.”

Mr Farmer added the company feared OFWAT’s report being published would lead to a potential “downgrade” to its credit rating and make it “much harder for South East Water to secure the additional financing which it requires.”

In his judgment, Mr Justice Chamberlain said, that given its provisional findings, OFWAT was under a “statutory duty to publish.”

The judge called the company’s attempt to block publication to protect the company’s reputation with investors and “keep the credit ratings agencies in the dark” as “objectionable in principle.”

The judge added blocking publication would create a situation where the company’s credit ratings were based on “materially incomplete information.”

He said this would mean “potential lenders might enter into contracts which they would not otherwise have entered into and existing investors might decide to retain their investments in circumstances where they would otherwise have exited.”

Mr Justice Chamberlain also dismissed the company’s “objectionable” plea that the company “should be allowed to control when and to whom the proposed decision is disclosed.”

A spokesperson for South East Water said: “We recently filed for judicial review of an OFWAT draft decision and sought an injunction. Following a hearing, the court did not grant the interim injunction. We respect the court’s decision on this.”

South East Water concluded: “We are now considering OFWAT’s draft decision and will respond via the appropriate channels, ahead of its final decision. We have no further comment at this time.”