Thames Water and Ofwat face Westminster grilling over growing debt pressures
MPs will grill Thames Water executives and market watchdog Ofwat amid growing concerns over the finances of the UK’s largest water supplier.
The Environment, Food and Rural Affairs Committee announced the upcoming hearing this morning, which will take place on 12 July.
Also invited to attend is Rebecca Pow, serving Conservative minister for environmental quality and resilience.
The committee will assess the the problems facing Thames Water and potential solutions – checking whether other water companies may face similar difficulties.
The current financial regulations and legal oversight of water utilities may also be probed, with questions on water quality, investment and corporate dividends.
Thames Water confirmed the hiring of crisis manager Sir Adrian Montague – formerly of British Energy and Network Rail – as its new chairman in a bid to reassure government ministers as it scrambles for cash from investors to tame its £14bn debt pile.
The former chairman of Anglian Water will take over just two days before the hearing.
His hiring follows the abrupt departure of former chief executive Sarah Bentley, who resigned after less than three years into the role amid controversies over her bonus, sewage spills and concerns Thames Water could not fund its investment plans to upgrade its creaking infrastructure.
The government has reportedly been preparing contingency plans in case of its failure.
In its bid to reassure government, Ofwat confirmed it will “keep companies’ financial resilience under close scrutiny” and that Thames Water still has “strong liquidity” with £4.4bn in cash and committed funding.
It also criticised the record of the UK’s largest supplier – which has 15m customers – recognising its “environmental record and leakage performance are poor”.
Thames Water also faces further criticism from the Environment Agency, which launched enforcement action over unauthorised sewage spills from the supplier last year – with the government body set to publish a report on the company’s record of tackling serious pollution incidents.
Morning Wire has approached Thames Water, Ofwat and DEFRA for comment.