UK hardens stance over indebted water supplier
by AFP Staff Writers
London (AFP) July 11, 2024

Britain's embattled Thames Water has been placed under closer regulatory scrutiny owing to serious financial difficulties, the industry's watchdog Ofwat said Thursday.

The announcement comes as the newly-elected Labour government could decide whether taxpayers should renationalise Britain's biggest water supplier after it avoided a state rescue under the previous Conservative administration.

"Given our concerns about the performance of the company, we are placing them in a turnaround oversight regime," Ofwat said in a statement.

The regulator added that the special measures would remain in place until evidence of "sustained" improvement in operational performance, investment and financial resilience.

Ofwat meanwhile rejected debt-plagued Thames Water's request to lift its average customer bill by 44 percent over the next five years.

It instead proposed that Thames, which serves around 16 million homes and businesses in London and elsewhere in southern England, lift bills by 23 percent during the period.

In a simultaneous development, Ofwat published a five-year financing plan for all English and Welsh water firms born out of privatisation of the industry in 1989.

The regulator proposed that customers would face an average increase of 21 percent or GBP 19 ($25) per year until 2030.

In recent times, the sector has also come under fierce criticism over failures to plug leaks and raw-sewage discharges on beaches and in rivers.

New environment minister Steve Reed was Thursday meeting water company executives to discuss "unacceptable" behaviour -- and urge more infrastructure investment in the crisis-hit sector.

"We will never look the other way while water companies pump sewage into our rivers, lakes and seas. This unacceptable destruction of our waterways should never have been allowed, but change has now begun so it can never happen again," he said.

"Today I have announced significant steps to clean up the water industry to cut sewage pollution, protect customers and attract investment to upgrade its crumbling infrastructure."

The news comes after Thames this week stated that its debt continues to climb despite increased revenues, leaving the group with cash reserves that will only take it through May next year.

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