When Tony Wray took over as chief executive at water giant Severn Trent just over two years ago, the company, which supplies most of Derbyshire, was in a downward spiral.

Profits were falling, complaints were up, its record for tackling leaks was one of the worst – and to cap it all, the company got caught up in a "price-fixing" scandal which resulted in it having to pay back £42m to its customers.

This disastrous performance came to a head in 2006 – before Mr Wray took the hot seat. Since then, Severn Trent has fought hard to restore its performance and its reputation. And recent statistics for customer complaints and its response to leaking pipes suggest it is finally moving in the right direction.

Today Mr Wray answers the key questions from business editor @Robin Johnson@about his time at the helm.

Q When you took over as chief executive at Severn Trent, it would be fair to say that the company was in disarray. Complaints were up, your record for the amount of water lost through leakage was one of the worst in the country and Severn Trent was found to have overcharged its customers to the tune of £42m. All this happened before you took on the role – yet you were the one who had to face the music. Was it hard carrying the can for something that you were not responsible for?

A Absolutely. I never thought that I would be the one standing on the steps of the Old Bailey in front of all the television cameras saying "This is a sad day for Severn Trent". It was not an easy thing to take but we stood up to our failings and it inspired us to get moving back up the league table. What really convinced me that we could turn things around was the team of people I had behind me. There remained a good team spirit and a service ethic. We had all the right ingredients, we just needed to bring it all together and show people what we were really capable of.

Q So did you have a business plan in mind to tackle the problem areas?

A We did have a plan but it did not involve taking on more staff – it was more about getting our processes right. It was not exactly rocket science. We changed staff rotas so we had the right number of people on a shift at the right time, we upgraded our telephone systems and re-trained staff. We also looked at our billing system. Some bills were being sent out to the wrong addresses. But we are now getting this right and it has led to fewer complaints. We implemented a very rigid process and stuck to it – and it has achieved tangible results. In September, the statistics issued by the Consumer Council for Water showed that in the financial year 2008-09, our complaints fell by 40%. But we are by no means complacent and will continue working on reducing complaints.

Q I imagine if you're dealing with fewer complaints, it allows the company to focus on other aspects of the business like improving the firm's record on leakage. At one stage, Severn Trent was one of the worst performers in terms of the amount of water lost from the system – something like 540 million litres a day. It's now about 491 million litres. What has the company changed in this area?

A We have speeded up our response to leaks but we cannot tackle every leak because we need to ensure that it is first economically viable to do so and makes environmental sense. We took on a network, parts of which are more than 100 years old. To upgrade every part of it to make it watertight would cost a huge amount of money and would see bills go through the roof. Water is very different to gas or electricity. If any gas is lost from the system, it is lost for ever. However, water does eventually find its way back into the system. Something we are also quite proud about is that in 2008-09 we saw a 27% drop in the number of pollution incidents and a 67% fall in the amount of unplanned interruptions to water supply.

Q In July, the water regulator Ofwat published its draft proposals on what water companies can charge over the next five years. It is expected to firm up these prices on November 26. If it sticks to its suggested price for Severn Trent, customers could see their bills cut by 8%, an average of £24. Do you think Severn Trent will be able to handle that?

A It's a tough figure – but don't get me wrong, it should be tough. It should spur companies like ourselves into devising more new innovations that can make them more efficient over the next five years. We find ourselves in a very challenging economic climate – not just for businesses but also householders. But at the moment, the average charge for water is 84p a day. When you look at how the cost of other utilities like gas and electricity has gone up recently, I believe we still offer very good value for money.

Q According to your last set of full-year results, Severn Trent did make a profit of £167.6m. With that in mind isn't there room for bills to come down a bit?

A What people might not appreciate is that for every £2 we make in profit £3 is re-invested in the company. We work on a cash-negative basis and I can't think of many businesses who do that. In the water business we have to look five, 10, maybe 20 years ahead.

Q What was particularly interesting about the results was that one of the reasons profits were down was that businesses were being more thrifty about the amount of water they use. We are often told by Severn Trent to reduce our water usage in the interests of the environment – but if we use less water, it impacts on Severn Trent's profits. What would you prefer we do?

A We should all use water sparingly. It is true that many businesses, and householders for that matter, have looked at their overheads and made efficiencies in terms of the amount of water and energy they use. This is actually good for our business too. It takes a phenomenal amount of energy to get water to a tap. Water and waste utilities consume colossal amounts of energy in order to provide the highest standards of drinking water in the world and sewage treatment which produces final effluent quality which is better than the river it is released into. The good news is that Severn Trent is already very close to Defra's aspiration for the industry – that is, 130 litres per person, per day.

Q In recent years, we seem to have seen an increase in freak weather, which has led to serious flooding in some areas of the country, including parts of Derbyshire. Will Severn Trent be doing anything in the future to address this?

A I think the first thing to say is that this should no longer be considered as freak weather. These extreme weather conditions will become more frequent as a result of wider climate change. We believe that the utilities sector – and those regulators who help to set the framework for its long-term planning – need to consider how assets can be made more resilient against the impact of more intense rainfall and the growing pressures that building and development have on our operating environment. We are working to protect vulnerable areas and putting in measures that can maintain a supply of clean water in the event of flooding.

Q In terms of Derbyshire, what plans does Severn Trent have in terms of improvements to the network?

A We will continue to invest, but the level of investment all depends on Ofwat's final decision on water bills on November 26. Only then will we know how much we will have to spend on improvements. As I said before, its draft proposal is quite tough – and we have been making representations to Ofwat.

Q Over the last couple of years the Severn Trent Group has sold off a number of its companies, including the likes of Biffa waste. Has this helped the firm to focus its efforts on getting its core business in order?

A Absolutely. It was a case of sticking to what you're good at. We had a whole host of companies – an engineering consultancy, telecommunications, even an IT firm. Today our core business is water and waste. We have Severn Trent Water and Severn Trent Water Services, which sees our expertise used across the globe.

Q As you mentioned, a lot depends on Ofwat's decision on November 26, but in terms of the future, what is your ambition for the company going forward?

A To keep improving. We are a company back on the rise. But there is still a lot of work to do and challenges ahead so we are not being complacent.