Enforcement case into Dŵr Cymrus management of its sewage treatment works and sewerage network

Case summary

In July 2024 we opened an enforcement investigation into Dŵr Cymru to investigate whether it was managing its wastewater treatment works and networks appropriately, such that the company limits spills and environmental harm from storm overflows.

This case is part of a wider investigation Ofwat has into all water and wastewater companies in England and Wales on this topic. For further detail about this investigation, how it has developed and the legal obligations being considered please see investigation into sewage treatment works.

On 12 March 2026, we published a consultation, setting out the findings of our investigation and our proposal to accept undertakings provided by Dŵr Cymru under section 19 of the Water Industry Act 1991 (WIA91), in lieu of us imposing an enforcement order and penalty on the company. The undertakings set out details of the steps Dŵr Cymru will take to address the non-compliance we identified and secure future compliance with its obligations. The undertakings also set out details of a proposed redress package valued at £44.72m to recognise the failures our investigation found. On 5 June 2026, we published our final decision for this case.

Summary of Ofwat’s decision

We have concluded that Dŵr Cymru has contravened:

Regulation 4(4), Regulation 4(2) and Schedule 2 of the Urban Waste Water Treatment (England and Wales) Regulations 1994 (UWWTR) by failing to operate and maintain its wastewater assets adequately, and to upgrade them where necessary, to provide sufficient performance. It has also failed to put in place adequate processes and systems to routinely monitor and maintain the capacity and performance of its assets to ensure they were meeting legal requirements.
Section 94 WIA91 by systemically contravening its UWWTR duties and failing effectually to provide drainage and deal with the contents of its sewers.
Condition P12 of its licence, which requires it to have in place adequate resources and systems of planning and internal control to carry out its legal obligations, by failing to put in place adequate processes to effectively identify and address emerging and present compliance risks; to ensure that its data gathering and analysis were fit-for-purpose; and to ensure that its Executive and Board received and/or sought sufficient information and assurance on the company’s operational performance.

After considering the consultation responses we remain satisfied that the undertakings proposed by Dŵr Cymru will secure the company’s compliance. We have therefore decided to accept the undertakings. As a result, our duty to impose an enforcement order to secure compliance falls away.

We have also concluded that it would be appropriate to accept the undertakings in lieu of the financial penalty we would otherwise impose in this case (£40.6 million, 7.5% of the company’s relevant turnover). The redress package within the undertakings will be entirely funded by the company, rather than customers.

The £44.72 million redress package will deliver a better outcome for customers and the environment by means of:

£40.66 million to be targeted at reducing spills at specific overflows with additional investment planned at sites during the 2025-30 period with the dual aim of addressing harm and reducing annual spills to below 20 at the relevant overflows; and investigating and sealing works on private parts of the sewer network to tackle groundwater infiltration which is a significant contributor to frequently spilling overflows.
£2.0 million to fund the mitigation of barriers to fish movement and habitat improvement in Welsh rivers;
£1.0 million to fund the creation and resource a joint misconnections taskforce; and
£1.066 million as part of a community environment fund (Cymuned Natur) that Dŵr Cymru will establish to provide grants to third parties upon successful application for projects intended to preserve and/or enhance the local environment, water quality, bathing water quality or biodiversity within Dŵr Cymru’s operating area.

The undertakings are enforceable by us under section 18 WIA91 and we will monitor Dŵr Cymru’s delivery of them.