Thames Water reports 40% rise in pollution incidents as debts swell

Thames Water saw a 40% increase in pollution incidents in the first half as its debts continued to spiral.

The company reported 359 so-called category one to three pollution incidents in the six months to 30 September, blaming an especially wet spring and summer.

Debt levels were £15.8 billion at the end of the period, before the company agreed a £3 billion extra loan deal to keep it operating beyond mid-2025.

Chief executive Chris Weston said the company has made "solid progress" on its attempted turnaround, but that after "record rainfall and groundwater levels in our region, pollutions and spills are unfortunately up".

He added that the company has reached "key milestones in establishing a more stable financial platform, agreeing a liquidity extension transaction proposal and progressing our equity raise process".

"The next critical step is receiving an investable final determination (from regulator Ofwat) which is fundamental to our future," he added.

The chief executive also defended bosses getting £770,000 in bonuses despite regulators saying it was not justified, as he called for steep hikes to consumer bills to be approved next week.

Chris Weston said: "We need to attract talent to this company… If we don’t offer competitive packages, people will not come and work at Thames."

"I completely understand that there are customers out there who struggle with their bills," he added, pointing to bills support offered to about 377,000 customers in the last year.

Heavily indebted Thames Water is England’s biggest water company, with about 16 million customers.

Mr Weston took on the job in January and was awarded a £195,000 bonus for his first three months at the firm.

Regulator Ofwat revealed in November that Thames Water was planning to use customer cash to pay the bonuses, but ruled that it was not “justified”.

Thames Water is in about £16 billion of debt, and is trying to secure another £3 billion to keep it running beyond mid-next year.

It faces a crunch decision from regulators next week, as they decide whether to allow a proposed 59% increase in bills over the next five years versus current levels.

Bosses have argued they need the extra money to make Thames Water “investible” enough to attract the funding, and to pay for improvements to its network of pipes and sewers.

On Tuesday, Mr Weston said regulator Ofwat "must recognise" the fundraising when it makes its final decision on December 19.

He said: "We need a regulatory settlement that recognises the reality and individuality of our business."

The company said on Tuesday that without the emergency cash, expected to be in place by the end of January, it would run out of money in March, which is sooner than a previous estimate of late May.

The demand came as the heavily indebted water company reported a 40% rise in sewage pollution to 359 incidents in the six months to September.

Mr Weston blamed a particularly wet spring and summer period, and said that problems with Thames Water’s infrastructure were "decades in the making".

"The infrastructure was designed to operate in the way that it operates.

"It is going to require decades to fix it, to change the way that it operates, and a significant amount of money."

Thames Water has been at the centre of growing public outrage over the extent of pollution, rising bills, high dividends, and executive pay and bonuses at the UK’s privatised water firms.

It recently asked regulator Ofwat to let it raise average bills by 59% over the next five years, compared with current levels.

The company, which serves about 16 million people, is in the grip of a funding crisis, and needs at least £3.3 billion in equity over the next five years to keep operating.

Thames Water is also the subject of bids by several investment groups who are looking to buy the company out.

But the process for an equity injection cannot be finalised until Ofwat makes a final decision on planned bill increases, due on December 19.

Ofwat has also appointed an independent monitor to supervise Thames Water as it attempts a turnaround.

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