Severn Trent says that it faces a bill of up to £35 million from the floods that hit large areas of Central and Western England last month and left 140,000 of its customers without water.

The Midlands-based company said that although it expected to recover up to £20 million of the charge from insurance, the total cost could rise as more assessment work on damage is carried out in coming weeks.

“The size and scale of this incident and the response are, we believe, unprecedented in the recent history of the UK water industry,” it said.

Severn Trent supplied more than 50 million litres of bottled water to homes across Gloucestershire, Worcestershire and surrounding areas after the floods swamped a water treatment works near Tewkesbury. It also sent in 1,300 water bowsers and installed emergency flood protection systems.

The company said: “At the current time, we estimate that the gross cost of dealing with the incident is likely to be in the range of £25 million to £35 million. However we expect this to be partly offset by insurance recoveries of between £10 million and £20 million.

“The estimated gross costs and recoveries may be subject to material revision over the coming weeks as the full extent of these become clearer and we will update the market.”

Severn Trent supplies three million homes in Central and Western England and has made more than £1 billion in profits over the past five years. In June, it acknowledged missing leakage targets for a second year in succession, raising the prospect of another fine from Ofwat. The water regulator is expected to announce by the end of this week the penalty that Severn Trent will face for missing the targets. It is thought that Ofwat could force the company to commit itself to spending more on pipe repair, rather than issue a fine, so that customers benefit.

Because of the floods’ exceptional nature, Severn Trent will not be required under Ofwat’s service standards to compensate customers whose service was disrupted.

The company said yesterday that it was to give £3.5 million to communities affected by the flooding.

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