Could Thames Water hike prices for customers by 40%?
Thames Water bosses have admitted the firm could face the risk of emergency nationalisation as its funding crisis deepens after shareholders refused to give the troubled utility extra cash.
The group – the UK’s biggest water supplier with 16 million households across London and the South East – revealed that its investors had pulled a £500 million funding lifeline that was due to be paid at the end of this month.
Thames Water blamed Ofwat, claiming that the regulator had made its business plan “uninvestible”.
It is understood that investors pulled the funding plan that was agreed last summer after Ofwat refused to bow to the water giant’s demands for a 40% bill hike for customers, an easing of capital spending requirements, as well as leniency on penalties for failing to meet targets.
The debt-laden firm’s chief executive, Chris Weston, admitted that if no alternative funding could be found by the end of next year, then it could face the prospect of a special administration – which would likely see the taxpayer pick up the bill.
However, Michael Gove has said that Thames Water’s leadership must “carry the can” for the company’s shortcomings and not pass higher bills onto consumers after successive management teams failed to invest enough.
The Communities Secretary branded the water company’s leaders “a disgrace” and claimed the firm had acted in an “arrogant” way towards its customers.