There were a lot of things that the installer did wrong here.
First - I'm sorry, but it's plain stupid to drill next to the main electrical line. Anything after that can be killed by the breakers, but don't risk it so close to the main line. 1 millimeter? That's like the thickness of a fingernail. I bet the installer was trying to run it right alongside, but come on, that's just plain stupid. He obviously knew it was there.
Now, the second stupid thing is to try and cover it up. Notify the homeowner immediately. Get someone else either helping, or get the people out of the house in case something else starts to burn rapidly. Then make sure the fire department is called. Chances are damage would have been minimal if this was reported correctly.
Because water doesn't do a thing on an electrical fire. A type ABC fire extinguisher needs to be used. If it's a small fire and no ABC extinguisher is present, try throwing baking soda on it.
Using water was absolutely useless. It won't stop an electrical fire. In that 10 minutes though, the fire dept. could have been there and had the entire thing out before it spread.
It's common sense, people...