News

Thames Water customers told ‘nothing’ will happen with bills

todayAugust 12, 2023 3

Background
share close
Thames Water customers told ‘nothing’ will happen with bills

Thames Water customers have been assured that “absolutely nothing” will happen to their bills or supply, as the heavily indebted firm scrambles to raise cash from investors to prevent collapse.

Ministers have continued efforts to reassure the public as Britain’s biggest water company struggles under a £14bn debt pile, with the government said to be laying the groundwork for the firm’s emergency nationalisation.

Health minister Neil O’Brien told Sky News: “They are still in the process of finding further resources from their own shareholders and that’s the first place they should look to, obviously.

“Of course the government does have contingency plans if this does become a problem.”

Politics Live: Boris Johnson allies to be named in special report on interference in partygate probe

Mr O’Brien refused to say if the utility firm could be taken into public ownership as a last resort, insisting he was “not able” to reveal what the contingency plans are.

But in a message to Thames Water customers he said that whatever the outcome: “Absolutely nothing is going to happen in terms of either their bills or their access to water, we have contingency plans – like we do in all of these network utilities – to manage any difficult situations.”

Downing Street also sought to allay concerns, saying while there are “clearly issues”, Thames Water has “secure and committed” funding.

It comes as the company’s troubles has shone a light on the precarious financial health of other British suppliers.

Several reports on Thursday suggested concerns about Thames Water’s finances had now broadened to other firms in the industry.

Ofwat, the industry regulator, said total debt in the sector hit £60.6 billion last year, increasing by more than £1 billion from the previous year.

However they said that overall, the sector “is continuing to attract international capital and is especially attractive to long term investors such as pension funds”.

“Indeed, there has been an additional equity injection of around £2bn since 2020, with companies acting to strengthen their financial position,” the statement said.

“Ofwat will continue to keep companies’ financial resilience under close scrutiny and work with companies to ensure they take action to ensure that they have the financial backing to deliver for customers and the environment.”

A growing number of suppliers responded to the increased scrutiny by lining up to defend their financial strength.

Thames Water, which is owned by a consortium of pension funds and sovereign wealth funds, stressed that it is working with shareholders to secure the cash it needs.

The statement came after Sky News revealed the government is discussing placing Thames Water into a special administration regime (SAR) that would effectively take the company into temporary public ownership if it collapses.

Such an insolvency process is rare and was used when the energy supplier Bulb collapsed in 2021, sparking concerns that it could cost taxpayers billions of pounds.

Click to subscribe to the Sky News Daily wherever you get your podcasts

Rebecca Pow, the water minister, did not say how much a government bailout could cost when pressed on the matter by Labour in the Commons.

She insisted the water sector as a whole is “financially resilient” and the government is confident that Ofwat is “working closely with any company that would be facing financial stress”.

Thames Water

Read more:
Ministers weigh contingency plan for collapse of Thames Water
Pressure on ‘rip off’ water industry unlikely to go away any time soon

Kemi Badenoch, the business secretary, admitted she is “very concerned” by the situation.

Thames Water has come under pressure in recent years over its poor performance in tackling leaks and sewage contamination, while facing criticism for handing out big rewards to top bosses and shareholders.

On Tuesday, Thames Water chief executive Sarah Bentley stepped down with immediate effect amid mounting worries over the financial stability of the company and criticism of her £1.6m pay packet despite the company’s environmental performance.

Written by: Newsroom

Rate it

Post comments (0)

Leave a reply

Your email address will not be published. Required fields are marked *


0%