Severn leakage rate surges after big freeze

Severn said it had drafted in additional resources to bring leakages back under control "as rapidly as possible".

The company usually handles around 1,600 calls a day over burst pipes in January but took double the amount this year.

Water companies have seen a huge increase in burst pipes in the thaw as previously frozen water expands within their own network as well as customers' supply pipes. Movements in thawing ground can also disrupt the network.

The group - which maintains a 46,000 km system of pipes - said it was too early to judge the impact on its annual leakage rates, which are monitored by regulator Ofwat.

The company serves a population of more than eight million people from the Bristol Channel to the Humber and from mid-Wales to the East Midlands.

In its trading update for the October to January period, Severn said it had seen signs of stabilisation in bad debt levels, as well as the fall-off in water usage by recession-hit businesses.

Year-on-year declines in business usage are now expected to cost up to 10 million in revenues instead of the 15m to 20m first feared.

Bad debts remained steady at around 2.3 per cent of turnover - the same level seen at the end of Severn's last financial year at the end of September - although the firm is closely monitoring future developments.

Last week Severn said it would not challenge Ofwat's "tough" ruling that it cut average household bills by 4% in real terms by 2015.

The utility giant said it would be necessary to impose a one-off 10 per cent cut in its dividend payment to shareholders in order to meet the determination.