The water company serving Shropshire and Mid Wales today claimed it has raised its game in dealing with leaks in response to criticism from regulator Ofwat.

Severn Trent, which serves 3.7 million household and business customers in England and Wales, also claims it is keeping its operating costs within the figure demanded by Ofwat.

The projected cost of last summer’s flooding remains unchanged from estimates of £25-£35 million, with insurance recovery estimates at £10-£20 million.

The figures are released in the company’s interim management statement for the past three months.

The company says trading has been in line with its expectations and is on track to meet the Ofwat determination for operating costs for the full year 2007/08.

“Our focus on continuous improvement is delivering tangible results in our improved performance on leakage management, with a significant reduction in levels of leakage in the period to date compared to the previous financial year. We remain on track to achieve the Ofwat annual target for the year ending 31 March 2008,” says the statement.

Severn Trent will publish a pre-close period trading statement on April 2 and announce its preliminary full year results on June 5.

In October Severn Trent predicted a slump in revenue – £12 million lower than expected.