Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Housebuilder Redrow is facing a messy legal dispute with Thames Water over damage to sewage pipes in the Berkshire town of Maidenhead, which underscores the risk of poorly understood underground infrastructure.
The water utility, under fire for sewage outpours from its ageing infrastructure, accused Redrow of “negligence” after its builders allegedly damaged a sewer underneath one of its development sites and blocked it with concrete.
Thames was “alerted to the injury” of the sewer “by virtue of a discharge from its sewer network upstream” of the building site, it stated in a legal claim filed with the High Court last month
Thames is now raising a legal stink. Its lawsuit claims £3.5mn in damages and interest from the FTSE 250 developer, which is in the middle of a multibillion-pound merger with larger rival Barratt that would cement the combined group’s position as the UK’s largest housebuilder.
The lawsuit comes at a time of intense scrutiny over sewage outpours and financial distress for the utility, which supplies almost a quarter of the UK’s population. It has asked for a 40 per cent increase, before inflation, in average household bills to £608, to pay for improvements to the water and sewerage network. Industry regulator Ofwat is expected to provide a draft ruling on the bill increase next month.
Water companies are not automatically consulted on proposed housing developments, which have a statutory right to be connected to the sewer system. Campaigners against new homes are often concerned at the impact on the local sewer and water systems.
More than 30 per cent of Thames’s sewer network is not mapped, the Financial Times revealed last week, underscoring the challenge the company faces as it tries to reduce spills.
Redrow began work on the Maidenhead development in 2018, which is next to a sewage treatment works, according to the court documents. Thames claimed Redrow’s builders did not establish exactly where the underground sewage pipes ran before they started digging up the site.
Thames said it was “reasonably foreseeable” that digging on the site risked damaging sewers underground, and that Redrow ignored “repeated warnings” that it needed to establish the exact location of the sewage pipes.
“The defendant [Redrow] was well aware that the . . . sewage treatment works continued to operate immediately to the south of the development site and that multiple sewers . . . crossed the [site],” Thames claims.
Thames said it had to “abandon” the blocked sewer and create a new one to divert sewage flows around the blockage, for which it is claiming costs of £2.5mn, plus £1mn in interest, which is accruing at £492 a day.
Redrow declined to comment on ongoing litigation. Thames declined to comment.
