Water firm responsible for parasitic outbreak must give up shareholder dividends, MP warns
Around 16,000 households and businesses were told not to use their tap water for drinking without boiling and cooling it first, as more cases are anticipated.
The owner of a water company embroiled in a parasitic outbreak in Devon affecting thousands of people should relinquish dividend payments to shareholders, a Tory MP has demanded.
Pennon, which owns South West Water, has increased its dividend payout despite being handed a £2.2million fine last year for sewage spills.
The company is also dealing with an outbreak of the cryptosporidium bug in the Brixham area, which has affected 16,000 households and businesses since May 15.
The UK Health Security Agency said the number of confirmed cases had risen to 57 as of Tuesday, a number which is expected to increase over the next few days.
Anthony Mangnall, the Conservative MP for Totnes, said Pennon should suspend the dividend payments or the chief executive should step aside.
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“Obviously it’s hugely disappointing at a moment where the public’s confidence in South West Water is at an all-time low they’ve decided to go ahead and pay out dividends.
“I have called for Pennon to suspend their dividend offering, which they can do, which they are able to do.
“I have also suggested that if they fail to do so, the chief executive should take the rap for this.
“I’m not against dividend payments in general, I’m just saying that at this point in time, where the public have been so badly let down, that we really consider how these dividends are paid.”
Pennon said it is paying out around £3.5 million in compensation after the outbreak of the waterborne disease that can cause diarrhoea and vomiting.
Two people have been taken to hospital while hundreds of others have fallen ill because of the outbreak, which South West Water has said was most likely triggered by animal faeces entering a damaged pipe.
Michael Smith, co-owner of the Venus Cafe near Brixham, said the water companies needed to take a dividend “holiday for a couple of years” and invest in infrastructure.
“While I totally understand that investors need some return otherwise they won’t invest, I think the amount of investment required right around Britain they probably need to take a holiday for a couple of years so that they can sort things out,” he said.
“I don’t know what the long-term impact will have. It is half-term next week, whether that is going to keep people away because they are still concerned with catching the bug.
“It is normally a phenomenally busy week and that really will be the proof in the pudding to be honest.
“We have two other cafes so we can sort of measure Broadsands against that.”
Pennon’s figures also showed underlying operating profits lifted 8.6% to £166.3 million in the year to March 31.