Thames Water appoints Adrian Montague as chairman amid questions about its future
Thames Water has chosen a new chairman just two days after its chief executive stepped down amid serious questions over the debt-laden company’s future.
It came as the Government tried to calm the waters by saying that the utility has “secure and committed” funding, and reassured customers that their supply would not be interrupted.
Sir Adrian Montague, who was previously the chair of Anglian Water, will take over the role on 10 July.
He takes over from Ian Marchant who announced in April he would step down when a successor was found.
Sir Adrian currently chairs Cadent Gas, Porterbrook Holdings and Manchester Airports Group. He is set to step down from the latter in September.
On Thursday, Thames Water’s struggles helped eyes to shift to the massive debt pile that the water sector has built up since privatisation.
Total debt in the sector hit £60.6 billion last year, increasing by more than £1 billion from the previous year, Ofwat said.
Late last year, the watchdog flagged four other firms whose financial health it was most worried about. These were Southern Water, Portsmouth, Yorkshire, and SES Water.
But ministers have reiterated that customers will not see their water supplies affected as a result of financial troubles.
Speaking in the House of Commons on Wednesday, water minister Rebecca Pow insisted the water sector as a whole is "financially resilient" and refused to comment on the speculation around Thames Water's future.
But when pressed by MPs, Ms Pow said there is "a lot of work going on behind the scenes" to ensure Thames Water customers "will not be impacted" if the company goes under.
She added: "And there is a process in place if necessary to move us to the next stage."
The country's biggest water supplier, Thames Water, could be on the brink of collapse as it faces £14bn worth of debt. Consumer Editor Chris Choi reports
It comes after Thames Water's boss Sarah Bentley stepped down with immediate effect on Tuesday in the face of increasing concerns about the company's financial stability.
Ms Bentley, who was appointed in 2020, said in May she would give up her bonus after the company’s environmental and customer performance suffered.
After giving up the bonus, the chief executive managed to double her pay, raking in £1.5 million, which a national officer at the GMB union called "a flimsy PR stunt".
Downing Street said water regulator Ofwat was on top of the issue, and that the Government was keeping it under observation.
“Of course the Government is carefully monitoring this but it is for the regulator in the first instance,” the Prime Minister’s official spokesman said.
He added that “while there are clearly issues with Thames Water, they have secure and committed funding”.
Senior Conservative Cabinet minister Mel Stride said on Wednesday that “water will continue to flow” whatever the outcome for the company.
Wading in on the saga, the Consumer Council for Water said the prospect of “substantial” bill rises to fund investment in the sector should come with a “strong safety net” to protect households that are struggling.
The group said that bill rises could come from companies’ investing more in environmental policies and improving water and sewerage services.
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 firm, which serves 15 million households, had a debt pile of £14 billion last year and the highest gearing level of all water companies – a key measure of a company’s financial risk.
Meanwhile, the largest shareholder of Tideway, the company building London’s new “super sewer”, sought to stress that the project is independent of Thames Water.
International Public Partnerships Limited, which owns an 18% stake in Tideway, said that “Tideway is a completely separate company to Thames Water”.
Thames Water is set to operate and manage the tunnel when construction completes, due to be by 2024.
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